When the Fed Buys Securities from the Public,banks' Reserves ________

question 295

Multiple Choice

When the Fed buys securities from the public,banks' reserves ________ and the quantity of money ________.

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

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Definitions:

Units

Basic quantities or measurements, such as pieces, meters, kilograms, used to specify an amount of something.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent, salaries, and insurance premiums, remaining constant regardless of the level of production.

Marginal Cost

The increase in cost that arises from producing one additional unit of a good or service.

Production Level

The quantity of goods or services that a company is capable of producing over a given period of time.