If the monetary base equals $400 billion and the money multiplier equals 2, then the money supply equals: Select one: O a. $400 billion. O b. $1,000 billion. O c. $800 billion. O d. $200 billion.

Suppose you read in the Wall Street Journal that the Fed was "increasing its target interest rate." It follows that the rate in question is the and one way in which Fed could achieve its new, higher target rate is by Select one: O a. Federal Funds Rate; conducting an open market sale O b. Federal Funds Rate; conducting an open market purchase O c. Prime Rate; conducting an open market sale d. Prime Rate; conducting an open market purchase

Suppose that the reserve requirement is 12.5% and that commercial banks are NOT holding excess reserves. If the Federal Reserve wishes to reduce the money supply by $200 billion, it should conduct an open-market purchase of $16 billion O open-market purchase of $25 billion open-market sale of $16 billion O None of these answers is correct. O open-market sale of $25 billion

By using open market operations, the Federal Reserve O a. adjusts the supply AND demand of reserves to keep the federal funds interest rate equal to its target. O b. adjusts the supply of reserves to keep the federal funds interest rate equal to its target. Oc controls banks' demand for reserves, thereby keeping the federal funds rate equal to its target. O d. adjusts the demand of reserves to keep bank rates in line with the federal funds rate target. O e. None of these answers is correct.