When the Fed Conducts Open-Market Purchases

question 17

Multiple Choice

When the Fed conducts open-market purchases,

• A)it buys Treasury securities,which increases the money supply.
• B)it buys Treasury securities,which decreases the money supply.
• C)it borrows money from member banks,which increases the money supply.
• D)it lends money to member banks,which decreases the money supply.

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Definitions:

Caveat Emptor

A legal principle that means "let the buyer beware," implying that it is the buyer's responsibility to perform due diligence before making a purchase.

Pre-owned Car

A vehicle that has been previously owned by one or more retail owners, typically sold through various outlets including dealerships and private sales.

Purchase Price

The amount of money paid to buy a product or service.

Societal Culture

The shared values, norms, beliefs, and practices that characterize a society or social group, influencing the behavior and attitudes of its members.