Though Its Open Market Operations, the Fed Can

question 50

Multiple Choice

Though its open market operations, the Fed can

• A)inject or remove reserves from the banking system.
• B)manipulate factors so as to maintain existing reserve conditions.
• C)counter movements in the reserves of depository institutions.
• D)All of the above are correct.

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Definitions:

Total Revenue

The total amount of money a firm receives by selling goods or services.

Price Elastic

Describes the responsiveness of the quantity demanded or supplied of a good to a change in its price; high elasticity indicates a significant response to price changes.

More Substitutes

The increase in alternative products or services that can replace or serve as options to a current product.

Demand Is Inelastic

A situation where the quantity demanded of a product changes very little in response to changes in its price.