Open Market Purchases by the Fed Reduce Total Reserves in the Banking

question 1

True/False

Open market purchases by the Fed reduce total reserves in the banking system.

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Definitions:

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash in the near term.

Net Present Value

The disparity in present values of cash inflows versus cash outflows within a certain time span.

Equity Shares

Represent ownership shares in a company, giving shareholders voting rights and a claim on company profits in the form of dividends.

Price-Earnings Ratio

A metric used to value a company by comparing its current stock price to its earnings per share.