An Open Market Sale of Securities by the Central Bank

question 67

Multiple Choice

An open market sale of securities by the central bank to banks usually will:

• A) diminish the inclination of banks to make loans.
• B) induce the banks to make more loans since their revenue will decrease if they do nothing.
• C) increase the amount of deposits in the banking system.
• D) increase the banks' willingness and ability to make loans.