Name H0h'0fl .7 _C._ {\\J The agency responsible for regulating the money supply \"1 the United States is a. the Comptroller of the Currency. b. the U.S. Treasury. c. the Federal Reserve. d. the U.S. Bank The Federal Reserve System does all except which of the following? a. control the supply of money b. stabilize the price level c. make loans to households directly d. exercise monetary policy to achieve high employment and steady GDP grow Slippose the Federal Reserve buys $2, 000 of government bonds from the open market. Given the raserve ratio being 10%, the money supply would a. increase by $10,000. b. decrease by $10,000. c. increase by $20,000. d. decrease by $20,000. Which of the following does the Federal Reserve not do? a. conduct monetary policy b. act as a lender of last resort c. convert the U.S. currencies into goid d. control the money supply When the Federal Reserve conducts open-market operations to increase the money supply, it a. redeems U.S. dollars. b. buys government bonds. c. raises die discount rate. d. decreases its lending to member banks. Suppose the reserve ratio is 10%. if the Federal Reserve sells $1.000 ofgovemment bonds in the open market, money supply would a. decrease by $10,000. b. increase by $10,000. 0. decrease by $20,000. d. increase by $20,000. Which ofthe following is true about money demand? a. When interest rate is high, people tend to hold less cash and save more in saving deposits. b. When interest rate is high, people tend to hold more cash and spend it. c. When interest rate is high, people tend to hold the same amount of cash. d. When interest rate is low, people tend to hold less cash and save more in saving deposits. When income level increases, households tend to hold a. more money; and thus money demand decreases. b. less money; and thus money demand increases. c. more money; and thus money demand increases. d. less money; and thus money demand decreases. Which ofthe following can the Fed do to lower the interest rate? a. buy government bonds in the open market 13. increase the discount rate c. increase the reserve requirement d. increase money demand