In the Context of Open Market Operations, When Inflation Is

question 16

Multiple Choice

In the context of open market operations, when inflation is a concern, the Fed sells securities to buyers who write checks to the Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, _____.

• A)credit becomes tighter
• B)banks increase the number of loans they make
• C)the money supply increases
• D)the inflationary pressures in the economy heat up

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Definitions:

B2B

Business-to-Business, describing transactions or relationships between two companies, as opposed to between a company and individual consumers.

B2C

Business to Consumer, a sales model in which businesses sell products or services directly to consumers.

C2C

Consumer to Consumer, a business model that facilitates transactions between individuals, typically through an online platform.

G2C

Government to Citizen, a model of e-government where government services and information are directly available to citizens through electronic means.