Suppose the Fed Sells $100 Million of U

question 63

Multiple Choice

Suppose the Fed sells $100 million of U.S. securities to the security dealers. If the reserve requirement is 20 percent, the currency holdings of the public are unchanged, and banks have zero excess reserves both before and after the transaction, the total impact on the money supply will be a:

• A) $100 million decrease.
• B) $500 million increase.
• C) $500 million decrease.
• D) $100 million increase.

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Definitions:

Group Objects

A feature in graphical and software development environments that allows multiple objects to be treated as a single unit for easier manipulation and management.

Check Box Control

An interactive element in a user interface that allows users to select or deselect one or more options from a list.

Subform/Subreport Control

A control in database applications that displays data from a related secondary source within a main form or report.

Form Design View

The mode in database applications where the layout, structure, and design of a form for entering or displaying data can be edited.