To Affect Bank Reserves and Deposits, the Fed Has to Buy

question 152

True/False

To affect bank reserves and deposits, the Fed has to buy securities directly from a bank.

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Definitions:

Savings Exceeds Investment

Describes a situation in which the amount of income saved by individuals or entities surpasses the amount being invested, which can indicate caution or a lack of attractive investment opportunities.

Keynes

John Maynard Keynes was a British economist whose ideas, known as Keynesian economics, had a major impact on modern economic and political theory and on fiscal policies of governments.

Demand

The desire and ability of consumers to purchase goods or services at a given price.

Unemployment

The state of being without a job despite actively looking for work, used as an indicator of the health of the economy.