Which of the following is an example of a contractionary monetary policy? a. a decrease in the required reserve ratio b. a purchase of U.S. government securities in the open market O c. an increase in the discount rate O d. an increase in the tax rate e. a reduction in the amount of transfer payments made to poor families घ

A purchase of U.S. government securities by the Fed causes   A. a multiple contraction of the money supply because deposits fall by more than the amount of the securities purchased.   B. a contraction of the money supply equal to the amount of the securities because all other transactions occur within the banking system.   C. an expansion of the money supply equal to the amount of the securities because all other transactions occur within the banking system.   D. a multiple expansion of the money supply because the required reserve ratio is less than one

Discuss with example monetary policy and how it establishes federal reserve structure of country?

why is the capital market is riskier than the money market?