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Softa [21]
3 years ago
5

Which of the following describes what the Fed would do to pursue an expansionary monetary​ policy? A. use discount policy to rai

se the discount rate B. use open market operations to buy Treasury bills C. raise the reserve requirement D. use open market operations to sell Treasury bills
Business
1 answer:
koban [17]3 years ago
7 0

Answer:

Option (B) is correct.

Explanation:

Open market operations is a monetary policy instrument that is used by the Federal reserve for controlling the money supply in an economy. If there is a need to decrease the money supply in an economy then fed sells the government securities to the public and on the other hand if there is a need to increase the money supply in an economy then fed purchases the government securities from the public.

So, here the expansionary policy is to purchases the treasury bills from the public.

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A depositor places $10,000 in cash in a commercial bank, where the required reserve ratio is 10 percent. The bank sends the $10,
garik1379 [7]

Answer:

C) $10,000, $1,000, and $9,000, respectively.

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The bank is only required to keep $1,000 in reserves, this means it can borrow the remaining $9,000 whenever they want.

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