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


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