A reduction of the discount rate by the Federal Reserve Banks has the direct effect of

A) making it less costly for commercial banks to borrow from the Fed.
B) making it more costly for the Treasury to finance deficits.
C) increasing commercial bank reserves.
D) increasing the stock of money.
E) doing all of the above.


A

Economics

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Many economists believe that in our modern economy, firm size is most directly determined by

a. concentration ratios that decrease as the number of firms decreases b. diseconomies of scale that make it less costly to increase firm size c. easy entry of new firms when there are economies of scale d. government policies that dictate optimal firm investment levels e. modern technology that gives an advantage to large-scale production methods

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A person is considered unemployed if she is

a. working at a part-time job. b. taking a vacation from a job. c. working at a full-time job in a foreign country. d. not working but is actively looking for work.

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If actual output exceeds potential output for a prolonged period of time, we would eventually expect factor prices to:

A. fall, causing the LAS curve to shift in to the left. B. fall, causing the SAS curve to shift down (to the right). C. rise, causing the SAS curve to shift up (to the left). D. rise, causing the LAS curve to shift out to the right.

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Which of the following is least likely to be a problem for monetary policy?

A. The recognition lag. B. The operational lag. C. The administrative lag. D. Cyclical asymmetry.

Economics