When the Fed Conducts an Open Market Operation by Purchasing

question 308

Multiple Choice

When the Fed conducts an open market operation by purchasing securities from a bank, .

• A) the bank's deposits increase but its reserves do not change
• B) the bank's reserves increase
• C) public holdings of securities increase
• D) the bank's deposits increase but its reserves decrease

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Definitions:

Common Resource

A resource that provides users with tangible benefits, but which is available to all members of a community or society and is susceptible to overuse, leading to depletion or degradation.

Hunting Licenses

Official permits required for individuals to legally hunt wildlife in certain areas within specified periods.

Peak Times

Periods of high demand or activity within a market or service sector, often leading to higher prices or increased waiting times.

Electric Company

A utility company that generates, transmits, and distributes electricity to consumers and businesses.