Before the fiNancial Crisis of 2008, If the Fed Bought

question 339

Multiple Choice

Before the financial crisis of 2008, if the Fed bought government securities in the open market, it

• A) decreased the excess reserves of the banking system, reducing excess reserves for overnight loans in the Federal funds market, thus lowering the Federal funds rate.
• B) increased the excess reserves of the banking system, reducing excess reserves for overnight loans in the Federal funds market, thus lowering the Federal funds rate.
• C) decreased the excess reserves of the banking system, reducing excess reserves for overnight loans in the Federal funds market, thus increasing the Federal funds rate.
• D) increased the excess reserves of the banking system, raising excess reserves for overnight loans in the Federal funds market, thus lowering the Federal funds rate.

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Definitions:

Formative Experiences

Events or periods in one's life that significantly influence their development, beliefs, and behaviors.

Canadian Generations

The distinct groups of people born in Canada around the same time, characterized by shared experiences and social norms.

Patriotic

Describes feelings, expressions, or actions showing love for and devoted loyalty to one's country.

Hidden Curriculum

The implicit, informal, and usually unintended teachings, principles, and viewpoints absorbed by students in an educational setting.