question archive Which of the following describes an expansionary monetary policy? (Please select all correct answers) (a) A decrease in the reserve ratio (b) FOMC directive to purchase securities (c) FOMC directive to sell securities (d) Increase in the overnight federal funds rate
Which of the following describes an expansionary monetary policy? (Please select all correct answers) (a) A decrease in the reserve ratio (b) FOMC directive to purchase securities (c) FOMC directive to sell securities (d) Increase in the overnight federal funds rate
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Which of the following describes an expansionary monetary policy? (Please select all correct answers)
(a) A decrease in the reserve ratio
(b) FOMC directive to purchase securities
(c) FOMC directive to sell securities
(d) Increase in the overnight federal funds rate
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Which of the following describes an expansionary monetary policy? (Please select all correct answers)
| (a) A decrease in the reserve ratio | Yes, this is expansionary because it increases the money supply. |
| (b) FOMC directive to purchase securities | Yes, this will put cash in banks and is therefore expansionary. |
| (c) FOMC directive to sell securities | No, this will contract the economy by taking money out of the banks as they buy the securities. |
| (d) Increase in the overnight federal funds rate | No, this will make borrowing more expensive, which is contractionary. |
