When the Fed Buys a U.S. Government Security

question 231

Multiple Choice

When the Fed buys a U.S. government security:

• A)​the volume of loans issued by the banking system increases and investment will tend to increase.
• B)​the volume of loans issued by the banking system increases and investment will tend to decrease.
• C)​the volume of loans issued by the banking system decreases and investment will tend to increase.
• D)​the volume of loans issued by the banking system decreases and investment will tend to decrease.

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Definitions:

Factors Of Production

The inputs used to produce goods and services

Property Rights

The ability of an individual to own and exercise control over scarce resources.

World Growth Rates

The rate at which the economic output of the world or specific countries increases over a given period of time.

Population

The entire group of individuals living in a particular area or country, or the total number of people within a specified demographic group.