When the Fed Sells One Million Dollars in Securities to a Commercial

question 145

Multiple Choice

When the Fed sells one million dollars in securities to a commercial bank,

• A) there is no change in the total assets of the Fed or the commercial bank.
• B) the commercial bankʹs total assets decrease by one million dollars.
• C) the Fedʹs total assets increase by one million dollars.
• D) None of the above answers is correct.

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Definitions:

Synaptic Integration

The summing of excitatory and inhibitory signals by a postsynaptic cell.

Postsynaptic Neuron

The neuron on the receiving end of a synapse, which receives signals from another neuron (the presynaptic neuron) through neurotransmitters.

Excitatory

Pertains to stimuli or substances that increase neuronal activity or facilitate the firing of neurons.

Inhibitory

Pertains to any process or substance that slows down or stops a particular reaction or activity.