Which of the Following Best Describes What Occurs When Monetary

question 199

Multiple Choice

Which of the following best describes what occurs when monetary authorities sell government securities?

• A) There is a decrease in the size of commercial banks' excess reserves, the money supply increases, and interest rates fall, thereby causing a decrease in investment spending and real GDP.
• B) There is a decrease in the size of commercial banks' excess reserves, the money supply decreases, and interest rates rise, thereby causing a decrease in investment spending and real GDP.
• C) There is a decrease in the size of commercial banks' excess reserves, the money supply decreases, and interest rates rise, thereby causing an increase in investment spending and real GDP.
• D) There is an increase in the size of commercial bank reserves, the money supply increases, and interest rates fall, thereby causing an increase in investment spending and real GDP.

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Definitions:

Mastication

The process of chewing food in preparation for swallowing and digestion.

Segmental Contractions

Contraction of small segments of the intestinal tract that aids in mixing and propelling contents within the gastrointestinal system.

Nutrients

Substances required by the body for growth, repair, and maintaining health, including vitamins, minerals, carbohydrates, proteins, and fats.

Digestive Tract

The series of hollow organs joined in a long, twisting tube from the mouth to the anus through which food is digested and nutrients are absorbed.