When the Fed Conducts Open-Market Sales

question 201

Multiple Choice

When the Fed conducts open-market sales,

• A) it sells Treasury securities,which increases the money supply.
• B) it sells Treasury securities,which decreases the money supply.
• C) it borrows from member banks,which increases the money supply.
• D) it lends money to member banks,which decreases the money supply.

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Definitions:

Probability

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1.

Compressive Strength

The capacity of a material or structure to withstand loads tending to reduce size, measured by the maximum stress it can withstand without fracture.

Normal Distribution

A bell-shaped curve that shows data distribution where most measurements are centered around the mean, denoting a predictable pattern of variability.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.