When the Fed Conducts an Open Market Purchase, the First

question 225

Multiple Choice

When the Fed conducts an open market purchase, the first round changes in the money creation process are that excess reserves ________, bank deposits ________, and the quantity of money ________.

• A) decreases; decreases; decrease
• B) increases; do not change; increase
• C) decreases; increases; does not change
• D) do not change; increases; increase
• E) increase; increase; increases

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