At a recent conference "The Fed -Where is it Going", Jason Alexdrovitch was discussing the policy tools that the U.S. central bank uses to control the money supply. During the conference he made the following statements: Statement 1: If the Fed wanted to use all of its three major monetary policy tools to increase the money supply, the Fed would sell bonds, reduce the discount rate and increase bank reserve requirements. Statement 2: If commercial banks are increasing their borrowings from the Federal Reserve banks, while the Fed is selling government securities, the borrowing of the commercial banks from the Fed will offset the effects of open market operations. Are Statement 1 and Statement 2 as made by Alexdrovitch correctStatement 1Statement （）①A. Incorrect Incorrect ②B. Incorrect Correct ③C. Correct Incorrect
A. ①
B. ②
C. ③
参考答案：B
解析：
If the Fed wanted to use all of its three major monetary control tools to increase the money supply, the Fed would buy bonds, decrease the discount rate, and decrease the bank reserve requirements. Each of these actions would inject more money into the banking system. When the Fed is selling government securities they are taking money out of the banking system thereby decreasing the money supply. But, if commercial banks are increasing their borrowings from the Fed, more money is being injected into the banking system. This increase in the money supply will offset the effects of the Fed’s open market operations.