If the Fed Purchases Government Securities in the Open Market,_____

question 6

Multiple Choice

If the Fed purchases government securities in the open market,_____.

• A)the money supply will decrease
• B)the money supply will increase only if the seller of those securities is a commercial bank
• C)the money demand will increase immediately
• D)the money demand will decrease immediately
• E)the money supply will increase through the commercial banking system regardless of who the seller is

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