An Open Market Purchase of Securities by the Central Bank

question 98

Multiple Choice

An open market purchase of securities by the central bank from banks usually will:

• A) increase the banks' revenue even if the bank does nothing with the reserves.
• B) induce the banks to make more loans since their revenue will decrease if they do nothing.
• C) decrease the amount of deposits in the banking system.
• D) decrease the banks' willingness and ability to make loans.

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Definitions:

Rhythmic Vibrations

Vibrations occurring at regular intervals, often signaling an underlying problem in mechanical systems.

Irregular Vibrations

Vibrations that occur in a mechanical system at unpredictable intervals and frequencies, often indicating a malfunction or imbalance.

Air Spring

A component used in vehicle suspension systems that uses air pressure to provide damping and support, typically resulting in smoother ride quality.

Longitudinal Forces

Forces that act along the length of a vehicle or structure, impacting its motion and stability, often related to acceleration and braking.