Which of the Following Transactions Has the Immediate Effect of Increasing

question 189

Multiple Choice

Which of the following transactions has the immediate effect of increasing the money supply M1?

• A) A commercial bank accepts deposits from its customers.
• B) A commercial bank lends some excess reserves in the federal funds market.
• C) A commercial bank increases its reserve holdings.
• D) A commercial bank buys government securities from the general public.

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