When the Fed Wants to Expand the Money Supply Through

question 123

Multiple Choice

When the Fed wants to expand the money supply through open-market operation, it

• A)sells government securities to the Treasury.
• B)sells government securities to member banks.
• C)buys government securities from member banks.
• D)buys government securities from the Treasury.

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Definitions:

Purchase Price

The amount of money that is paid to acquire a good, service, or asset.

New Business Site

The location chosen for establishing a new branch, office, or manufacturing facility of a company.

Patent

A legal right granted by the government to an inventor, giving the holder exclusive rights to use, make, or sell the invention for a certain period.

Intangible Assets

Assets lacking physical substance, such as patents, trademarks, and goodwill, that are nevertheless valuable to a company.