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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Definitions:

Concise

Expressing or covering much in few words; brief in form but comprehensive in scope.

Manipulation

involves influencing or controlling someone or something to one's advantage, often without their knowledge or consent.

Truthfulness

The quality of being honest, accurate, and straightforward in communication or behavior; paramount in building trust and credibility.

Honesty

The quality of being truthful, transparent, and free from deceit or falsehood.