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If the Fed Sells $15 Million Worth of Government Bonds

Question 65

Multiple Choice

If the Fed sells $15 million worth of government bonds to Bank A, then initially


A) the amount of deposits held by Bank A will increase by $15 million.
B) the amount of reserves held by Bank A will decrease by $15 million.
C) the amount of bonds held by Bank A will decrease by $15 million.
D) the amount of deposits held by Bank A will decrease by $15 million.
E) the amount of reserves held by Bank A will increase by $15 million.

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