Suppose the Fed Buys $10 Million of U

question 187

Multiple Choice

Suppose the Fed buys $10 million of U.S.securities from the public.Assume a reserve requirement of 5 percent and that all banks hold no excess reserves.The total impact of this action on the money supply will be

• A)an increase of $200 million.
• B)a decrease of $200 million.
• C)a decrease of $10 million.
• D)an increase of $10 million.

---

Definitions:

Threats

Indications or warnings of potential harm, danger, or negative outcomes.

Feedback

Information given to a person or system about their performance or behavior, intended to guide future improvements.

Strategically

In a manner that is carefully planned to achieve a specific end or advantage.

Communication

The process of transmitting information, ideas, emotions, skills, and knowledge from one person or group to another.