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Which action can the Federal Reserve take to pursue a tight-money policy?

a. raise tax rates on all taxpayers to increase revenues
b. decrease the amount of money in the economy
c. regulate trading between banks and customers
d. prevent the government from running a deficit
e. increase the amount of money in the economy

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Divya Singh
Divya SinghLv10
10 Oct 2020

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Related questions

Which action can the federal reserve take to pursue a tight-money policy?

a. raise tax rates on all taxpayers to increase revenues

b. decrease the amount of money in the economy

c. regulate trading between banks and customers

d. prevent the government from running a deficit

e. increase the amount of money in the economy

During the fall of 2007, the United States economy began a descent into deep recession. As a result, the federal government and the Federal Reserve took action to stimulate economic growth. Which of the following would have been an appropriate fiscal policy? There could be more than one answer! Please be 100% sure on this question:)

A. the Federal Reserve increasing the money supply to reduce the interest rate

B. the federal government providing tax refunds to all taxpayers

C. the federal government increasing its regulation of banks

D. the federal government spending more money to build more infrastructures

E. the federal government beginning to close failing banks.

1. Which of the following are examples of expansionary monetary policy?

increase discount rate

decrease reserve requirement

buy bonds

sell bonds
I and III only
II and III only
I and IV only
II and IV only
I, II, and III only
2. The discount rate is
the rate the Fed charges member banks to borrow money.
set directly by the Fed through monetary policy.
the rate banks charge each other to borrow money.
set directly by the Fed through fiscal policy.

the rate banks charge their best customers to borrow money.
3. If during an economic expansion, U.S. financial investors begin to buy stocks increasing the demand for money, what action could the Federal Reserve take to prevent inflation in the economy?
Increase the discount rate
Decrease the discount rate
Buy bonds on the open market
Decrease the required reserve ratio
Extend credit to overseas markets

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