The Immediate Effect of a Bank's Purchase of U

question 8

Multiple Choice

The immediate effect of a bank's purchase of U.S. government securities from the Fed is a(n) _____

• A) decrease in the bank's assets.
• B) increase in the bank's reserve requirements.
• C) decrease in the Fed's assets.
• D) increase in the Fed's assets.
• E) decrease in the discount rate.

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Definitions:

John Adams

The second President of the United States (1797-1801), a Founding Father who played a leading role in independence from Britain and the drafting of the U.S. Constitution.

First Continental Congress

A convention of delegates from twelve of the thirteen American colonies in 1774, convened to respond to the British "Intolerable Acts."

Revolutionary War

The military conflict between Great Britain and its thirteen colonies in North America from 1775 to 1783, which resulted in the independence of the United States.

British Government

The central government of the United Kingdom, composed of the Executive (Cabinet and Prime Minister), the Legislature (Parliament), and the Judiciary.