Table 29-1 Effects of an Open-Market Transaction on the Balance

question 2

Multiple Choice

Table 29-1 Effects of an open-market transaction on the balance sheets of banks and the fed (in millions of dollars) In Table 29-1, the Federal Reserve System has

• A) sold $10 million in government securities to banks, taking payment in cash.
• B) sold $10 million in government securities to banks, taking payment from the bank's reserves.
• C) purchased $10 million in government securities from banks, paying for them with increases in banks' reserves.
• D) purchased $10 million in government securities from banks, paying for them with new Federal Reserve notes.

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Definitions:

Sum

The result of adding two or more numbers together.

Even Integers

Whole numbers that are divisible by 2.

Estimate Time

Approximating the duration that a task or activity is expected to take.

Geometric Sequence

A sequence of numbers where each term after the first is found by multiplying the previous one by a fixed, non-zero number called the ratio.