Through open market operations, the Fed
A) controls the demand for reserves, but not the supply of reserves, in the banking system.
B) controls the supply of reserves and the demand for reserves in the banking system.
C) controls the supply of reserves, but not the demand for reserves, in the banking system.
D) has influence over, but cannot directly control, the supply of reserves and the demand for reserves in the banking system.
C
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As long as the marginal utility per dollar from pizza is greater than the marginal utility per dollar from soda, then to maximize utility a consumer will buy
A) more soda to equalize the marginal utility per dollar between soda and pizza. B) less pizza and less soda. C) more pizza and less soda. D) equal amounts of pizza and soda.
If the value of a cable TV franchise is uncertain, too much may be bid for the franchise. This is an example of
a. moral hazard b. an authority relation c. the winner's curse d. the principal-agent problem e. adverse selection
The Fed has which of the following as its strongest control over the money supply?
a. interest rate changes b. the discount rate c. open market operations d. the required reserve rate
Which of the following earns little or no interest?
a. a stock b. money c. Treasury bill d. CD