Module 12 Quiz
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Complete the sentence: "If money supply increases, interest rate would ___________."
Decrease
Which of the following is related to reducing money supply?
Federal Reserve sells assets
What type of financial institution specializes in market making?
Investment banks
Which of the following is not a policy tool used by the Federal Reserve to manipulate the money supply?
Printing more dollars
Which of the following is not traditionally considered a function of money?
Providing a hedge against inflation
What is fractional reserve banking?
When banks create money by lending out part of their deposits
