An Open Market Purchase by the Fed

question 55

Multiple Choice

An open market purchase by the Fed

• A) increases the total amount of reserves in the banking system.
• B) decreases the total amount of reserves in the banking system.
• C) does not change the total amount of reserves in the banking system.
• D) causes the reserve requirement to fall.

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Definitions:

Goods And Services

Goods are tangible items that satisfy human wants and needs, while services are intangible activities or benefits that one party can offer to another.