The Federal Reserve Banks Buy Government Securities from Commercial Banks

question 109

Multiple Choice

The Federal Reserve Banks buy government securities from commercial banks. As a result, the checkable deposits

• A) of commercial banks are unchanged, but their reserves increase.
• B) and reserves of commercial banks both decrease.
• C) of commercial banks are unchanged, but their reserves decrease.
• D) and reserves of commercial banks are both unchanged.

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Definitions:

Secondary Appraisal

The process of evaluating one's ability to cope with or manage the consequences of a stressful event after initially recognizing it as a threat or challenge.

Stressor

Any stimulus that causes stress, invoking a physical, chemical, or emotional response.

Threat

A perceived danger or risk, posing a potential harm or negative outcome to someone or something.

Second-hand Smoke

Smoke that is not directly inhaled from a burning tobacco product but is breathed in from the environment, posing health risks to nonsmokers.