If the Fed Sells a U

question 75

Multiple Choice

If the Fed sells a U.S.Treasury bill to a member of the public, the banking system has

• A)less reserves and the money supply tends to fall.
• B)more reserves and the money supply tends to fall.
• C)less reserves and the money supply tends to grow.
• D)more reserves and the money supply tends to grow.

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Definitions:

Price-quality

The perceived relationship between the price of a product and its quality, where higher prices are often associated with higher quality.

Prestige-value

The perceived value of a product or service based on its prestige, status, or luxury appeal, rather than its functional attributes.

Price-prestige

The phenomenon where consumers perceive higher-priced goods to be of superior quality, leading to a positive correlation between price and the amount of prestige or status believed to be conferred by a good.

Promotional Mix

The combination of marketing tools used by a business to execute its promotional strategy, including advertising, sales promotion, public relations, and direct marketing.