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If the Fed Conducts an Open Market Purchase of Bonds,the

Question 109

Multiple Choice

If the Fed conducts an open market purchase of bonds,the


A) money supply decreases as reserves are injected into the banking system
B) demand for money increases as reserves are drained from the banking system
C) demand for money decreases as reserves are injected into the banking system
D) money supply increases as reserves are injected into the banking system
E) money supply increases as reserves are drained from the banking system

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