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A Sound Policy to Combat a Temporary Liquidity Shortage in the Banking

Question 54

Multiple Choice

A sound policy to combat a temporary liquidity shortage in the banking system would be


A) a reduction in the discount rate.
B) a decrease in the discount rate.
C) the purchase of government securities by the Fed under a repurchase agreement.
D) the sale of government securities by the Fed under a repurchase agreement.

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