At one time,people in a certain country had no access to banks;they relied exclusively on currency.Then,a fractional-reserve banking system was created.As a result,the money supply
A) increased.The central bank could have reduced the size of this increase by buying bonds.
B) increased.The central bank could have reduced the size of this increase by selling bonds.
C) decreased.The central bank could have reduced the size of this decrease by buying bonds.
D) decreased.The central bank could have reduced the size of this decrease by selling bonds.
Correct Answer:
Verified
Q38: The Fed can decrease the money supply
Q39: The discount rate is
A)the rate at which
Q41: In a fractional-reserve banking system,an increase in
Q42: If the reserve requirement is 10 percent,which
Q44: If the Federal Reserve increases the interest
Q45: The money supply decreases if the Fed
A)sells
Q46: The Fed increases the reserve requirement,but it
Q47: If the Fed increases the reserve ratio
Q48: The money supply increases when the Fed
A)buys
Q186: When the Fed decreases the discount rate,
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