When the Fed _{--------------------} Securities in an Open Market Operation

question 104

Multiple Choice

When the Fed _{--------------------} securities in an open market operation, banks' reserves_{--------------------} , and therefore lending _{--------------------}_.

• A)sells; increase; increases
• B)buys; decrease; decreases
• C)buys; do not change; does not change
• D)sells; decrease; increases
• E)buys; increase; increases

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Definitions:

Conditioned Response

A learned reaction to a conditioned stimulus that occurs because of previous conditioning, distinguished from unconditioned response.

Unconditioned Stimulus

An Unconditioned Stimulus is any stimulus that naturally triggers a response without any prior learning or conditioning.

Unconditioned Response

An involuntary, instinctive reaction to an external stimulus that takes place without the need for prior training or conditioning.

Unconditioned Response

A natural, automatic reaction to a stimulus that occurs without prior conditioning or learning.