Question

last question of the night..
The country has entered a period of economic growth, but prices are rising too rapidly. To stabilize prices, the Federal Reserve decides to

decrease the federal funds rate

decrease the reserve requirement

raise the discount rate

buy more government securities

Answer 1

i think A .. HBU @Mertsj @whpalmer4

Answer 2

I would think c

Answer 3

When the Fed is worried that the economy is growing too fast or prices are rising too rapidly, it tightens up reserve positions by selling government securities or allowing maturing securities to run off. This process is known as draining reserves. If, on the other hand, the Fed becomes concerned that the economy is not growing fast enough, or is headed into a recession, it can inject new reserves into the banking system by buying securities from securities dealers. By buying, instead of selling, securities, the Fed is expanding, rather than contracting the supply of bank reserves, thereby making it easier for banks to meet their reserve requirements and make new loans.

Read more: http://www.answers.com/topic/monetary-policy#ixzz2q32IkDwp

Answer 4

@mertsj is right
i go for c as well