Exhibit 16-3
-In the situation shown in Exhibit 16-3, how could the Fed return the economy to potential output?
A)decrease government spending
B)decrease excess reserves in the banking system
C)sell U.S. government bonds to banks
D)increase the discount rate
E)lower the required reserve ratio

Question

Exhibit 16-3 
-In the situation shown in Exhibit 16-3, how could the Fed return the economy to potential output?
A)decrease government spending 
B)decrease excess reserves in the banking system 
C)sell U.S. government bonds to banks 
D)increase the discount rate 
E)lower the required reserve ratio

Quizplus · Accepted Answer

The Answer of Exhibit 16-3 
-In the situation shown in Exhibit 16-3, how could the Fed return the economy to potential output?
A)decrease government spending 
B)decrease excess reserves in the banking system 
C)sell U.S. government bonds to banks 
D)increase the discount rate 
E)lower the required reserve ratio

Exhibit 16-3 -In the Situation Shown in Exhibit 16-3, How Could the How