When inflation threatens, which of the following responses is the Fed likely to make?

a. expand the money supply
b. lower the discount rate and thereby the cost of borrowing by banks
c. lower interest rates
d. sell off government bonds to banks and others thereby reducing the funds banks can lend to individuals and businesses


Answer: d

Political Science

You might also like to view...

In the mid-1770s, approximately ______ newspapers were serving the colonies.

A. 10 B. 15 C. 25 D. 39

Political Science

_______________ has experienced a high level of growth since

1980, despite having significant levels of corruption in its government. a. The United States, particularly in the 1990s b. Nigeria c. Brazil d. China

Political Science

In 1970, Congress passed a measure lowering the voting age from twenty-one to eighteen in both state and federal elections. The Supreme Court, however, declared this measure unconstitutional in

a. Oregon v. Mitchell. b. Massachusetts v. Laird. c. Kissinger v. Halperin. d. Texas v. Johnson.

Political Science

Which of the following is the most common act of political participation in the U.S.?

a. voting b. campaigning c. contacting a public official d. joining a political group e. marching and demonstrating

Political Science