Which of the following effects occur when the Treasury borrows from depository institutions?
A) The money supply increases
B) Legal reserves and excess reserves remain unchanged
C) Total spending remains unchanged since depositories, not the public, are lending to the Treasury
D) If unemployment is low, prices will fall
E) The increased quantity of government securities will depress interest rates in the short run
Correct Answer:
Verified
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Q87: More than half of all Federal expenditures
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Q89: Treasury borrowing from the nonbank public has
Q91: Treasury borrowing directly from the Federal Reserve
Q92: Treasury borrowing directly from Federal Reserve:
A) Increases
Q93: The net effect of government retirement of
Q94: Retiring government debt held by depositories causes:
A)
Q95: Retirement of government debt through budget surpluses
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