Question: the first option for the blue line is increase , decrease and does not change . the second option is does not change, decrease ,

2. Open market operations versus discount loans Consider an expansionary open market operation, Suppose the Federal Resorve buys government securities from the nonbank public. Sappose that the sellers of government securities cash the checks and hold on to the cash. Then, ceteris panbus, bank reserves currency in circulation , and thus the monetary bast will Suppose now that the Federal Reserve wants to increase the monetary base by increasing bank, reserves only. Which of the following actions enables the Fed to achieve its goal? Require the non-banking public to repay discount loans Sell the govemment securlties exclushely to comimercial banks Lend to the non-barking public through the term auction fadity Lend to commenclat banks at the discount window Suppose now that the Federal feserve wants to increase the monetary base by increasing bank reserves only. Which of the following actions enables the fed to achiove its goal? Require the non-banking public to repay discount loans Sell the government securities exduively to commerdai banks Lend to the non banking public through the term auction facility Lend to commercial banks at the discount window By lending to commercial banks through the discount window, the Federal Reserve alters and thus aifects
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