Exam 2 - SAMPLE QUESTIONS

Doinganyoftheabove 45

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Unformatted text preview: t, 8 percent b. 8 percent, 10 percent c. 10 percent, 12.5 percent d. None of the above is correct. ____ 39. Which of the following lists two things that both increase the money supply? a. lower the discount rate, raise the reserve requirement b. lower the discount rate, lower the reserve requirement c. raise the discount rate, raise the reserve requirement d. raise the discount rate, lower the reserve requirement 10 Name: ________________________ ID: A ____ 40. Other things the same, if the Fed raises the discount rate, then banks choose to borrow a. more from the Fed so reserves increase. b. more from the Fed so reserves decrease. c. less from the Fed so reserves increase. d. less from the Fed so reserves decrease. ____ 41. When the Fed decreases the discount rate, banks will a. borrow more from the Fed and lend more to the public. The money supply increases. b. borrow more from the Fed and lend less to the public. The money supply decreases. c. borrow less from the Fed and lend more to the public. The money supply increases. d. borrow less from the Fed and lend less to the public. The money supply decreases. ____ 42. If the public decides to hold more currency and fewer deposits in banks, bank reserves a. decrease and the money supply eventually decreases....
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