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If the Fed Were to Use All the Currently Operational

Question 6

Multiple Choice

If the Fed were to use all the currently operational tools of monetary policy to pursue an easy-money policy, it would:


A) lower reserve requirements, lower the discount rate, buy securities in the open market, lower interest rates on required and excess reserve balances, make fewer term deposits available
B) raise reserve requirements, raise the discount rate, sell securities in the open market, increase interest rates on required and excess reserve balances, make more term deposits available
C) buy a huge volume of commercial paper
D) setup another "Maiden Lane" special purpose vehicle to conceal the Fed's balloning balance sheet
E) put the regional Federal Reserve Banks up for sale

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