Moneytary - TACN1

If the central bank _________ the reserve requirement → banks must hold more money → they have less to lend → money supply decreases.

• increases

• decreases

If a central bank __________ the discount rate, the cost of borrowing for the banks increases

• increases

• decreases

If the discount rate _________ → borrowing becomes cheaper → banks lower their lending rates → credit expands → money supply increases.

• increases

• decreases

Open market operations are one of _______ tools used by the Fed to affect the availability of money and credit

• three

• one

• two

Open market operations, changing the reserve requirement for banks and setting the _______