If the Fed buys a U.S. government bond from a member, the:
A) banking system has more reserves and the money supply tends to grow.
B) banking system has less reserves and the money supply tends to grow.
C) banking system has more reserves and the money supply tends to fall.
D) banking system has less reserves and the money supply tends to fall.
E) banking system has more reserves and the rates of interest will increase
Correct Answer:
Verified
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