Download 18) Purchasing government bonds through open

18) Purchasing government bonds through open market transactions, allows the Federal
Reserve to:
A) increase the money supply in the private sector.
B) offer discounts on future purchases.
C) increase money in the treasury.
D) pay a high rate of interest on the bonds.
19) What would be a way for the Federal Reserve to slow down the economy when it is
growing too quickly or is inflationary?
A) sell more government bonds
B) print more money
C) encourage the stock market
D) buy back government bonds on the open market
20) An open market sale by the Fed:
A) decreases the total amount of reserves in the banking system.
B) causes the reserve requirement to fall.
C) does not change the total amount of reserves in the banking system.
D) increases the total amount of reserves in the banking system.
21) A decrease in the discount rate:
A) increases the cost of reserves borrowed from the Fed.
B) reduces the cost of borrowing from the Fed.
C) signals the Fed's desire to reduce