If the Fed Sells $7

question 100

Multiple Choice

If the Fed sells $7.5 billion of U.S.bonds in the open market and the reserve requirement is 15 percent,M1 will eventually

• A)Decrease by $50 billion.
• B)Increase by $7.5 billion.
• C)Increase by $50 billion.

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Definitions:

Federal Income

Earnings subject to federal income tax, including wages, salaries, and other forms of compensation, as regulated by the federal government.

Minimize Exposure

Taking steps to limit one's contact with potentially hazardous substances or situations to reduce risk of harm.

Negative Outcomes

Undesirable or harmful results or effects stemming from an action, decision, or situation.

Quality Procedures

Standardized methods and practices designed to ensure that products or services meet prescribed standards of quality.