When the Fed Buys $100 Worth of Bonds from First

question 24

Multiple Choice

When the Fed buys $100 worth of bonds from First National Bank,reserves in the banking system

• A) increase by $100.
• B) increase by more than $100.
• C) decrease by $100.
• D) decrease by more than $100.

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Definitions:

Excise Tax

A tax on the sale or use of specific products or transactions.

Tax Burden

The total amount of taxes paid by an individual, corporation, or sector, often expressed as a percentage of income or GDP.

Price Paid

The amount of money exchanged for a good or service.

Consumers

Individuals or groups that purchase goods and services for personal use.