Which of the following is true concerning the operation of monetary policy?
A) When the Federal Reserve sells a government security it withdraws reserves from the commercial banking system.
B) The Federal Reserve may only sell government securities to fund government deficits that have been approved by the President of the United States.
C) When the Federal Reserve purchases a government security it withdraws reserves from commercial banks.
D) When the Federal Reserve purchases a government security the debt of the U.S. government is decreased.
Correct Answer:
Verified
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