When the Fed Buys Treasury Bills as a Means of Increasing

question 13

Multiple Choice

When the Fed buys Treasury bills as a means of increasing the money supply, it places ____ pressure on their prices and ____ pressure on their yields.

• A)upward; upward
• B)downward; downward
• C)upward; downward
• D)downward; upward

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Definitions:

Fraud in the Inducement

A type of fraud that occurs when a person is deceived into entering into an agreement through misrepresentation of material facts.

Shelter Rule

In law, this rule allows a person who acquires goods from someone who did not have clear ownership to gain rightful ownership if the original seller had the power to transfer rights in the goods to a good faith purchaser.

Impostor Rule

A legal principle that holds a person pretending to be someone else liable for the deception if it results in harm or loss.

Negotiable Instrument

A written agreement promising to pay a designated sum of money, either upon request or at a fixed future date, with the obligor's name mentioned on the document.