Question 42 When the Fed purchases government securities, it Question 42 options: a) automatically raises the discount rate b) automatically raises the legal reserve requirment c) decreases banks’s reserves and makes possible a decrease in the money supply d) increases banks’ reserves and makes possible an increase in the money supply

Government securities are government borrowing financings that are used to fund everyday activities…

Answered: Question 42 When the Fed purchases…

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter6: Government Influence On Exchange Rates

Section: Chapter Questions

Problem 16QA

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Question 42

When the Fed purchases government securities, it

Question 42 options:

a)	automatically raises the discount rate

b)	automatically raises the legal reserve requirment

c)	decreases banks’s reserves and makes possible a decrease in the money supply

d)	increases banks’ reserves and makes possible an increase in the money supply

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