When the Fed Conducts Open-Market Purchases

question 72

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) banks buy Treasury securities from Fed,which increases the money supply.
• D) banks buy Treasury securities from the Fed,which decreases the money supply.

---

Definitions:

Neurons

Specialized cells in the nervous system that transmit information through electrical and chemical signals.

Prefrontal Cortex

The frontmost region of the frontal lobes in the brain, involved in complex cognitive behavior, personality expression, decision making, and moderating social behaviour.

Temporal Lobes

Regions of the brain located beneath the temples, involved in processing auditory information and encoding memory.

Working Memories

A cognitive system that holds information temporarily available for processing tasks such as reasoning and comprehension.