If the Fed Buys U

question 126

Multiple Choice

If the Fed buys U.S. government bonds from the public, it

• A) increases the volume of reserves in the banking system and the money supply tends to grow.
• B) decreases the volume of reserves in the banking system and the money supply tends to grow.
• C) increases the volume of reserves in the banking system and the money supply tends to fall.
• D) decreases the volume of reserves in the banking system and the money supply tends to fall.

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Definitions:

Respondeat Superior

A legal doctrine holding that an employer is responsible for the actions of employees performed within the scope of their employment.

Dangerously Incompetent

A description for someone lacking the necessary skills or knowledge to perform a task or role safely and effectively, posing a risk to themselves or others.

Nonemployee Agent

A nonemployee agent is an individual or entity that acts on behalf of another, without being on their formal payroll or considered an employee.

Principal

The main party to a transaction, contract, or financial instrument who has the primary interest and rights.