If the Fed Sells Government Securities to the General Public

question 279

Multiple Choice

If the Fed sells government securities to the general public in the open market,

• A) the Fed gives the securities to the public; the public pays for the securities by writing checks that, when cleared, will increase commercial bank reserves at the Fed.
• B) the Fed gives the securities to the public; the public pays for the securities by writing checks that, when cleared, will decrease commercial bank reserves at the Fed.
• C) the public gives the securities to the Fed in exchange for a Fed check, which, when deposited at commercial banks, will increase their reserves at the Fed.
• D) the public gives the securities to the Fed in exchange for a Fed check, which, when deposited at commercial banks, will decrease their reserves at the Fed.

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Definitions:

Coordination

The ability to use different parts of the body smoothly and efficiently together or to organize activities harmoniously.

Learning

The process of acquiring new understanding, knowledge, behaviors, skills, values, or preferences.

Reticular Formation

A complex network of nerve pathways in the brainstem connecting the spinal cord, cerebrum, and cerebellum, and mediating overall level of consciousness.

Vital Reflexes

Involuntary responses to specific stimuli that are essential for maintaining homeostasis and survival, such as the blink or gag reflex.