When the central bank purchases government securities from the open market, what impact does it have on the money supply and interest rates?  A. Increases the money supply; increases interest rates  B. Decreases the money supply; decreases interest rates  C. Increases the money supply; decreases interest rates  D. Decreases the money supply; increases interest rates

Which of the following actions of a central bank would decrease the money supply in the economy?A.Increase the target interest rateB.Decrease the minimum reserve requirement.C.Reduce the interest rate paid on bank reserve.D.Buy bonds through open market operations.

How does the Federal Reserve discount rate affect the money supply?A.The Federal Reserve raises the rate in order to encourage banks to lend less.B.The Federal Reserve charges consumers less in order to discourage borrowing.C.The Federal Reserve charges consumers more in order to discourage borrowing.D.The Federal Reserve lowers the rate in order to encourage banks to lend less.SUBMITarrow_backPREVIOUS

If the Federal Reserve System buys government securities,Multiple Choicethe money supply will not change.interest rates on the securities will not change.interest rates on the securities will fall.the equilibrium price of the securities purchased will fall.

What is the effect when the Federal Reserve increases interest rates?Responsesthe cost of taking out loansthe cost of taking out loansconsumers spend more in the economyconsumers spend more in the economythe government receives a large increase in tax revenuethe government receives a large increase in tax revenuesudden inflation causes the prices of goods and services to go up

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.