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.

---

Definitions:

R&D Expenditures

Refers to the spending dedicated to research and development activities by businesses or governments aiming to innovate and improve products or services.

Industry Concentration

The degree to which a small number of companies control the majority of market share within a particular industry.

Industry Concentration

A measure of the extent to which a small number of firms dominate total production, sales, or employment within an industry.

R&D

Research and Development, a business or government activity that focuses on the development of new products or the improvement of existing products.