An Open Market Purchase of Securities by the Fed Leads

question 28

Multiple Choice

An open market purchase of securities by the Fed leads to all of the following EXCEPT

• A)an initial increase in excess reserves.
• B)an increase in bank lending.
• C)a decrease in the quantity of money.
• D)an increase in banks' reserves.
• E)an increase in the monetary base.

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Definitions:

Blink Reflex

An involuntary blinking of the eyelids elicited by stimulation of the cornea or sudden approach of objects, serving as a protective mechanism for the eyes.

Palpebral Fissure

Space between the upper and lower eyelids.

Nasolacrimal Duct

Duct that leads from the lacrimal sac to the nasal cavity.

Ciliary Glands

Modified sweat glands located at the edge of the eyelids, responsible for lubricating the eye surface through tear production.