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liq [111]
4 years ago
11

Through open market operations, the Federal Reserve buys and sells government securities to influence the supply of bank reserve

s. When the Fed wants to increase excess reserves held by banks, it does what? A) buy bonds B) sell bonds Eliminate C) increase interest rates D) increase reserve ratios
Law
1 answer:
levacccp [35]4 years ago
5 0

When the Fed wants to increase excess reserves held by banks it buys bonds.

Option A

<u>Explanation:</u>

From the given case, if the federal bank wants to increase excess reserves it can increase the supply of money lowering the reserve requirement.

This in turn will increase the excess reserves in the system there by giving boost the economy by lending loans for infrastructure development and manufacturing sector.

By the way of central bank buying bonds in the open market it will increase the supply of money into the economy by exchanging bonds for cash from the general public.

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Prevalent day-to-day decision making of democracies is the majority rule, though other decision making approaches like supermajority and consensus have been equally integral to democracies. They serve the crucial purpose of inclusiveness and broader legitimacy on sensitive issues, counterbalancing majoritarianism, and therefore mostly take precedence on a constitutional level.

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Democracy makes all forces struggle repeatedly to realize their interests and devolves power from groups of people to sets of rules. Western democracy, as distinct from that which existed in antiquity, is generally considered to have originated in city-states such as Classical Athens and the Roman Republic, where various schemes and degrees of enfranchisement of the free male population were observed before the form disappeared in the West at the beginning of late antiquity. The English word dates back to the 16th century, from the older Middle French and Middle Latin equivalents.

According to American political scientist Larry Diamond, democracy consists of four key elements: a political system for choosing and replacing the government through free and fair elections; the active participation of the people, as citizens, in politics and civic life; protection of the human rights of all citizens; and a rule of law, in which the laws and procedures apply equally to all citizens. Todd Landman, nevertheless, draws our attention to the fact that democracy and human rights are two different concepts and that "there must be greater specificity in the conceptualisation and operationalisation of democracy and human rights"

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