When the Fed bonds, it takes money out of the economy and reduces reserves which contracts the money supply, causing interest rates to

What will happen in the money market if the Federal Reserve decreases the discount rate?Multiple choice question.Banks borrow more from the Fed and make more loans, causing the money supply to increase.Banks borrow less from the Fed and make fewer loans, causing the money supply to decrease.Banks borrow more from the Fed and make more loans, causing the money supply to decrease.Banks borrow less from the Fed and make fewer loans, causing the money supply to increase.

What is one way the Federal Reserve can reduce the amount of money available in the economy?A.Selling treasury securitiesB.Raising the discount rateC.Lowering the interest on reservesD.Buying treasury securities

All else being equal, if a central bank sells government bonds from the market it would:Group of answer choicesdecrease the money supply.most likely decrease savings in the economy.mean the supply of loanable funds would move to the right.decrease interest rates.

When the Reserve Bank sells government securities, the banks'  reserves will decrease and lending will contract, causing a decrease in the money supply.   reserves will increase and lending will expand, causing an increase in the money supply.   reserves/deposit ratio will increase and lending will expand, causing an increase in the money supply.   reserve requirements will increase and lending will contract, causing a decrease in the money supply.   reserves will increase and lending will contract, causing no change in the money supply.

Which tool of monetary policy allows the Federal Reserve to decrease the money supply?A.Purchasing treasury securities on the open marketB.Decreasing the discount rate on short-term loansC.Increasing the reserve requirement on banksD.Lowering interest on reserves paid to banks