Which of the Following Is True Concerning the Operation of Monetary

question 249

Multiple Choice

Which of the following is true concerning the operation of monetary policy?

• A) When the Federal Reserve sells a government security it withdraws reserves from the commercial banking system.
• B) The Federal Reserve may only sell government securities to fund government deficits that have been approved by the President of the United States.
• C) When the Federal Reserve purchases a government security it withdraws reserves from commercial banks.
• D) When the Federal Reserve purchases a government security the debt of the U.S. government is decreased.

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Definitions:

z

A standard score that indicates how many standard deviations an element is from the mean of its distribution.

Standard Normal Random Variable

A random variable with a mean of 0 and a standard deviation of 1, following a normal distribution.

Area

The measure of the extent of a two-dimensional figure or shape in a plane.

z

In statistics, a z-score indicates how many standard deviations an element is from the mean.