When the Fed Uses Open Market Operations to Sell Some

question 5

Multiple Choice

When the Fed uses open market operations to sell some of its Treasury securities, there will be

• A)an outward shift in the supply schedule of loanable funds.
• B)an inward shift in the supply schedule of loanable funds.
• C)no shift in the supply schedule of loanable funds.
• D)an outward shift in the demand schedule for loanable funds.

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Definitions:

Confusion

A state of being bewildered or unclear in one’s mind about something, often resulting from lack of understanding or clarity.

Groupthink

A deterioration of mental efficiency, reality testing, and moral judgment in the interest of group solidarity; extreme form of consensus

Harmony

A state of agreement or concord, often used to describe peaceful and coherent relationships among individuals or elements within a whole.

Group Solidarity

The unity, cohesion, and sense of belonging among members of a group, often seen in shared goals or values.