Solved

Increases in the Discount Rate Tend to Tighten the Money

Question 55

Multiple Choice

Increases in the discount rate tend to tighten the money supply by


A) making it more expensive for member banks to augment their reserves by borrowing from the Fed.
B) forcing member banks to recall loans.
C) inducing banks to sell government securities.
D) reducing the amount of demand deposits that a given amount of reserves can legally support.
E) increasing the interest rate banks are legally allowed to pay depositors.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents