Question

Unit 6 lesson 7- monetary policy tools
1-
What is required reserve ratio?
- the portion of a deposite that a bank must keep on hand
2-
Why does the Fed rarely change the reserve requirment?
- it can be disruptive to the whole banking system
3-
How does the Fed encourage banks to loan mor money?
- by reducing the discount rate
4-
How does a bond sale made by the fed affect the money supply?
- The sale decreases the money supply
5-
What is the policy used most by the Fed change the money supply?
- open market operations

Answer 1

All of them are correct I already took the test