When the Fed Buys $100 Worth of Bonds from First

question 24

Multiple Choice

When the Fed buys $100 worth of bonds from First National Bank,reserves in the banking system

• A) increase by $100.
• B) increase by more than $100.
• C) decrease by $100.
• D) decrease by more than $100.

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Definitions:

Bureaucracy

A system of administration characterized by a hierarchical structure, specialization of functions, and a set of rules and procedures.

Business Entrepreneur

An individual who identifies a business opportunity and takes financial risk to establish and manage a new enterprise.

The State

Consists of the institutions responsible for formulating and carrying out a country’s laws and public policies.

Coercive Socio-Political System

A form of governance or societal structure where power is maintained and exercised through force, intimidation, or repression.