Which of the Following Indicates the Primary Mechanism by Which

question 191

Multiple Choice

Which of the following indicates the primary mechanism by which the money supply expands?

• A) The U.S. Treasury prints additional currency.
• B) The Fed purchases additional bonds, which increases the reserves available to the banking system.
• C) The public decides to hold more currency rather than checking deposits.
• D) The U.S. government purchases additional gold.

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Definitions:

Retirement Fund

A financial arrangement designed to replace employment income upon retirement, commonly managed through savings or investment plans.

Retirement Goal

A financial target or savings plan aimed at ensuring financial security for an individual upon retirement.

Compounded Annually

This refers to the process where interest is calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan.

Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.