If the Fed Conducts an Open Market Purchase of Bonds,the

question 153

Multiple Choice

If the Fed conducts an open market purchase of bonds,the

• A) money supply decreases as reserves are injected into the banking system
• B) demand for money increases as reserves are drained from the banking system
• C) demand for money decreases as reserves are injected into the banking system
• D) money supply increases as reserves are injected into the banking system
• E) money supply increases as reserves are drained from the banking system

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