The Fed Cannot Predict the Effects of Open Market Operations

question 108

Multiple Choice

The Fed cannot predict the effects of open market operations with perfect accuracy because of

• A)changes in people's desires for cash.
• B)foreigners desire to hold U.S.dollars.
• C)banks' desires to hold excess reserves.
• D)All of the above are correct.

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Definitions:

Checking Account

A bank account that allows the account holder to withdraw funds, write checks, and make electronic transactions.

Via The Internet

The process or method of accessing information or services using the internet.

Traveler's Checks

Preprinted, fixed-amount checks designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.

Deposit Slip

A slip accompanying a bank deposit and containing an itemized list of checks or cash deposited, the date, and the depositor’s signature.