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Retirement of Government Debt Held by the Federal Reserve Tends

Question 96

Multiple Choice

Retirement of government debt held by the Federal Reserve tends to have an anti-inflationary effect because:


A) It drains funds from the public through taxes
B) It uses surpluses to retrieve Treasury securities from the Federal Reserve
C) It increases legal reserves by the amount paid to the Fed
D) It does not return unspent revenues to the general public
E) It decreases spending by transferring money from the general public to investors

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