If the Fed Sells Government Securities

question 115

Multiple Choice

If the Fed sells government securities,

• A) there will be no effect on the quantity of money.
• B) commercial bank reserves will decrease.
• C) commercial bank reserves will increase.
• D) the government's debt will be decreased.

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Definitions:

Reactive Intermediate Species

Highly reactive molecules or ions formed transiently in the course of a chemical reaction, which go on to react further to form the final products.

Sp3 Hybridization

A form of orbital hybridization in which one s orbital and three p orbitals mix to form four equivalent sp3 hybrid orbitals, typically found in tetrahedral molecular geometries.

Monochlorinated Products

Chemical compounds obtained by adding a single chlorine atom to a molecule, often as intermediates in organic synthesis or in the production of insecticides and solvents.

Chlorine Radical

A reactive atom of chlorine that possesses an unpaired electron, making it extremely reactive with other substances.