If the Fed Injects Reserves into the Banking System and They

question 78

Multiple Choice

If the Fed injects reserves into the banking system and they are held as excess reserves,then the monetary base ________ and the money supply ________.

• A)remains unchanged;remains unchanged
• B)remains unchanged;increases
• C)increases;increases
• D)increases;remains unchanged

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Definitions:

Taxes

Mandatory financial charges or other types of levies imposed upon a taxpayer by a governmental organization.

Dividend Income

Earnings received from owning shares of stock in a corporation, typically paid out from the company's profits.

Corporations Taxed

The process through which businesses are subjected to tax on their income or profit by the government.

Tax Exempt

Income or transactions that are free from tax at the federal, state, or local level.