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Which of the following is not an expansionary activity? Decreasing the reserve requirement from 10% to...

Which of the following is not an expansionary activity?

Decreasing the reserve requirement from 10% to 8%.

Conducting an open market purchase.

Decreasing the discount rate.

None of the above.
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Answer #1

Option D is correct. None of the above.

Expansionary activity includes: - decrease the interest rate or to increase the money supply to boost the economic activity. So reduction of Reserve requirement will lead to increase of money supply and market purchase will also increase the money supply. Decreasing the discount rate is also an expansionary activity.

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