The portfolio decision: is one that involves the choice of how idle funds are he

Question

The portfolio decision:

is one that involves the choice of how idle funds are held and one that the Fed attempts to influence via manipulating little r (the reserve requirement).

is one that involves the choice of how idle funds are held and one that the Fed attempts to influence via manipulating the discount rate of interest.

is one that involves the choice of how banks decide to create money.

is one that involves the choice of how idle funds are held and one that the Fed attempts to influence via its open market operations.

is one that involves the choice of how idle funds are held and one that the Fed attempts to influence via manipulating little r (the reserve requirement).

is one that involves the choice of how idle funds are held and one that the Fed attempts to influence via manipulating the discount rate of interest.

is one that involves the choice of how banks decide to create money.

is one that involves the choice of how idle funds are held and one that the Fed attempts to influence via its open market operations.

Explanation / Answer

Option D.

Portfolio decisions are choices made by the individuals about how to hold idle wealth or funds. Through open market operations, the fed can affect the choices to hold bonds, stocks, etc by individuals.

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