If the Fed Sells U

question 12

Multiple Choice

If the Fed sells U.S.government securities to drain reserves from banks,which of the following is most likely to occur?

• A)The demand for money will increase and the interest rate will rise.
• B)The money supply will increase and the interest rate will fall.
• C)The interest rate will rise and the quantity of money demanded will fall.
• D)The money supply will decrease and the interest rate will fall.
• E)The interest rate will fall and the quantity of money demanded will increase.

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Definitions:

Ontologies

In philosophy, refers to the study of being or existence, and in computer science, a structured framework for organizing information or knowledge.

Hinduism

Ancient religion of India that stresses the unity of all being and the ideal of oneness with ultimate reality.

Buddhism

A spiritual tradition and religion founded on the teachings of Buddha, focusing on personal spiritual development and the attainment of a deep insight into the true nature of life.

Octavio Paz

A Mexican poet and diplomat, awarded the Nobel Prize in Literature in 1990, known for his works that explore the nature of individual experience and cultural identity.