If the Fed Purchases Securities Worth $10 Million from a Commercial

question 83

Multiple Choice

If the Fed purchases securities worth $10 million from a commercial bank, the banking system's balance sheet will show

• A)an increase in securities held of $10 million and an increase in bank reserves of $10 million.
• B)an increase in securities held of $10 million and a decrease in bank reserves of $10 million.
• C)a decrease in securities held of $10 million and an increase in bank reserves of $10 million.
• D)a decrease in securities held of $10 million and a decrease in bank reserves of $10 million.

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Definitions:

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A naturally occurring cholinesterase inhibitor used in the treatment of myasthenia gravis and as an antidote to anticholinergic poisoning.

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Acetylcholine

A neurotransmitter in the nervous system involved in muscle movement and memory.

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Nicotine is a stimulant drug found in tobacco products that can lead to addiction, it acts on the nervous system to increase alertness and can have harmful health effects.