The Federal Reserve establishes the federal funds rate and influences the money supply by buying and selling Treasuries in the open market. If the Fed buys Treasuries, the money supply will ________ and the federal funds rate will ________
A) decrease, decrease
B) decrease, increase
C) increase, stabilize
D) increase, decrease
E) stabilize, increase
Answer: D
Explanation: If the Fed buys Treasuries, the money supply will increase, and the federal funds rate will decrease. If the Fed sells Treasures, the money supply will decrease, and the federal funds rate will increase.
You might also like to view...
Which of the following is not an example of wasting assets?
a. mines; b. stands of timber; c. gas wells; d. oil wells; e. trademarks
Hedge funds larger than $250 million must register with the Securities and Exchange Commission and provide some information as to trades and their individual portfolios
Indicate whether the statement is true or false
The "Four Ps" are Product, Promotion, Price, and Personnel.
Answer the following statement true (T) or false (F)
Media richness measures how well a communication medium can generate revenues
Indicate whether the statement is true or false