When the Federal Reserve Sells a Government Security to a Commercial

question 73

Multiple Choice

When the Federal Reserve sells a government security to a commercial bank

• A) the cash reserves of the commercial bank decrease.
• B) the net worth of the commercial bank increases.
• C) the loans of the commercial bank will increase.
• D) the balance sheet of the commercial bank is thrown off balance.

---

Definitions:

Protective Custody

A form of imprisonment or care designed to protect an individual from potential harm by others, often used for witnesses or victims in legal cases.

Incapacitation

The act of rendering someone unable to act or respond, often used in the context of criminal justice to prevent further offenses.

Social Judgment

The process of evaluating the behavior, qualities, or abilities of others within a social context.

Moral Judgment

The process of determining the ethical or moral righteousness of certain actions, decisions, or behaviors based on a set of societal or personal standards.