Solved

When the Fed Buys a U

Question 391

Multiple Choice

When the Fed buys a U.S. bond in the open market


A) its action has no effect on the total reserves or the money supply because the check it writes increases reserves at one bank but they fall at another.
B) total reserves increase by the amount of the purchase but the money supply stays the same.
C) its action expands total reserves and the money supply.
D) its action contracts total reserves and the money supply.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents