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If a Central Bank Wants to Pursue an Expansionary Monetary

Question 18

Multiple Choice

If a central bank wants to pursue an expansionary monetary policy, then it will:


A) conduct an open market purchase of bonds to expand the banking system's monetary base.
B) conduct an open market sale of bonds to expand the banking system's monetary base.
C) raise the currency ratio in an attempt to raise the money multiplier.
D) raise the bank rate that it charges banks to borrow.

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