Table 142 Monetary Aggregates of the U Assume an Original Balance Sheet: Refer to Table 14

question 132

Multiple Choice

Table 14.2 Monetary Aggregates of the U.S.Financial System
$\begin{array}{|l|r|}\hline\text { Item } & \text { Amount } \\\hline \text { Cash held by public } & \text { \$100billion } \\\hline\text { Transactions deposits } & \text { \$300billion } \\\hline\text { Required reserves } & \text { \$30billion } \\\hline\text { Excess reserves } & \text { \$0billion } \\\hline \text { U.S. bonds held by public } & \$ 475 \text { billion }\\\hline \end{array}$
Assume an original balance sheet: Refer to Table 14.2.If the Fed sells $20 billion in bonds to the public,all of the following are true except

• A)The public will hold $495 billion worth of bonds.
• B)M1 will decrease initially by $20 billion.
• C)M2 will expand initially by $20 billion.
• D)Additional increases in M1 will occur after the multiplier process.

---

Definitions:

Macros

Automated sequences of computer commands or scripts designed to simplify repetitive tasks within software applications.

Encrypt

Changing information or data into a coded format specifically to protect against unauthorized access.

Password

A secret sequence of characters that is used to access a computer system, network, or online account.

Workbook

A file containing one or more spreadsheets, used for organizing, analyzing, and storing data, typically in spreadsheet software.