There are several ways that governments can increase or decrease the money supply. Match the descriptions below with the corresponding policy tool. It is possible that a description does not apply to any of the terms. 1. Open Market Operations 2. Reserve Requirement 3. Discount Rate a. A government printing more currency. b. An increase in the percentage of deposits that anks must keep on hand. c. An increase in the interest rate that a central bank charges commercial banks for loans. d. An increase in government spending e. A central bank purchasing existing bonds.

Question

Business

Michelle Fletcher

10 January, 00:11

There are several ways that governments can increase or decrease the money supply. Match the descriptions below with the corresponding policy tool. It is possible that a description does not apply to any of the terms. 1. Open Market Operations 2. Reserve Requirement 3. Discount Rate a. A government printing more currency. b. An increase in the percentage of deposits that anks must keep on hand. c. An increase in the interest rate that a central bank charges commercial banks for loans. d. An increase in government spending e. A central bank purchasing existing bonds.

+4

Answers (1)

Know the Answer?

Waylon Huynh · Answer 1

1. Open Market Operations - A central bank purchasing existing bonds.

2. Reserve Requirement - An increase in the percentage of deposits that banks must keep on hand.

3. Discount Rate - An increase in the interest rate that a central bank charges commercial banks for loans.

Therefore, a government printing more currency or an increase in government spending, both are not a part of any monetary policy tools provided.