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An Open Market Purchase of Bonds by the Fed

Question 36

Multiple Choice

An open market purchase of bonds by the Fed


A) drains reserves from the banking system and decreases the money supply
B) injects reserves into the banking system and increases money demand
C) injects reserves into the banking system and increases the money supply
D) drains reserves from the banking system and increases the money supply
E) injects reserves into the banking system and decreases the money supply

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