the economics of money, banking, and financial markets

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29. 
    

    There are two ways in which the Bank can provide additional reserves to the banking system:
    it can ____ government bonds or it can ____ advances to banks to commercial banks.
    A) sell; extend
    B) sell; call in
    C) purchase; extend
    D) purchase; call in
    Answer: C
    Diff: 1 Type: MC Page Ref: 380 - 382
    Skill: Recall
    Objective List: 16.2 Discern who controls the monetary base and what causes it to change

    
    


30. 
    

    A decrease in ____ leads to an equal ____ in the monetary base in the short run.
    A) float; increase
    B) float; decrease
    C) deposits at the Bank; decrease
    D) advances to banks; increase
    Answer: B
    Diff: 1 Type: MC Page Ref: 382 - 383
    Skill: Recall
    Objective List: 16.2 Discern who controls the monetary base and what causes it to change

    
    


31. 
    

    An increase in ____ leads to an equal ____ in the monetary base in the short run.
    A) float; decrease
    B) float; increase
    C) advances to banks; decrease
    D) deposits at the Bank; increase
    Answer: B
    Diff: 1 Type: MC Page Ref: 383
    Skill: Recall
    Objective List: 16.2 Discern who controls the monetary base and what causes it to change

    
    


32. 
    

    A decrease in ____ leads to an equal ____ in the monetary base in the long run.
    A) float; increase
    B) float; decrease
    C) securities; increase
    D) securities; decrease
    Answer: D
    Diff: 1 Type: MC Page Ref: 383
    Skill: Recall
    Objective List: 16.2 Discern who controls the monetary base and what causes it to change