A discretionary policy approach to economic stabilization

• Requires a unique set of actions to be pursued based on the current status of the economy

Which of the following increases the quantity of money?

• A decrease in the required reserve ratio

Which of the following is an expansionary monetary policy?

• Buying bond

When the Central Bank purchases government securities on the open market, band reserves ... and the monetary base ...

• Decrease, increase – answer in class

• (increase, increase) – answer from the book?

An increase in the required reserve ratio will result in

• A decrease in the quantity of money

A higher real interest rate typically induces consumers to

• Save more

If the Central Bank wants to decrease the quantity of money, it can

• Raise the discount rate