When the Fed conducts an open market purchase,the first round changes in the money creation process are that excess reserves ________,bank deposits ________,and the quantity of money ________.

Question

Quizplus · Accepted Answer

When the Fed conducts an open market purchase, it buys securities, which increases bank reserves. This leads to an increase in excess reserves, allowing banks to create more deposits through lending, thus increasing the quantity of money.

When the Fed Conducts an Open Market Purchase,the First Round