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Which of the following would not increase the supply of money in a fiat money economy?

a. The Federal Reserve sells gold.

b. The Federal Reserve decides to sell existing Treasury securities.

c. The Federal Reserve increases the required reserve ratio.

d. The Federal Reserve increases the discount rate.

e. Fewer deposits are made in banks.

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Mahe Alam
Mahe AlamLv10
14 Sep 2020

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Related questions

Which of the following actions that fed uses to increase the supply of money.

A. Lowering the reserve requirements for banks and raising the discount rate that banks pay on short-term loans from the Federal Reserve Bank to increase supply.

B. Raising the bank reserve requirement and raising the discount rate that banks pay on short-term loans from the Federal Reserve Bank to increase supply.

C. Lowering the reserve requirements for banks and lowering the discount rate that banks pay on short-term loans from the Federal Reserve Bank to increase supply.

D. Raising the bank reserve requirement and lowering the discount rate that banks pay on short-term loans from the Federal Reserve Bank to increase supply. 

1. Answer True or False for each of the following.

Alan Greenspan is the current chair of the Federal Reserve Board.

The Fed rarely changes the required reserve rate.

The FOMC is the policy making arm of the Federal Reserve.

When the Federal reserve buys securities it raises the money supply.

Holding money in the expectation of better future investments is known as the precautionary demand for money

2. Identify for each of the following whether the actual multiplier in the banking system is rising or falling?

Banks increase their reserves beyond what is necessary.

The Federal Reserve lowers the target Fed Funds rate.

Households hoard currency more than before.

The Federal Reserve raises the Required Reserve Rate.

Currency increasingly disappears into the underground economy or overseas.

The Federal Reserve sells bonds.

There are (5/7/12) members of the Fed Reserve Board of Govenors.

Which of the following contributes to making the Federal Reserve an independent policymaking body?

__ There are 12 Federal Reserve banks.

__ Members of the Board of Governors are appointed for 14-year terms.

__ Its role is written into the U.S. Constitution.

The Federal Reserve's primary tool for changing the money supply is the (discount rate / open market operation/ reserve requirement). In order to increase the number of dollars in the U.S. economy (the money supply), the Federal Reserve will (buy/sell) government bonds.

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