An Open Market ________ Leads to A(n)________ of Reserves and Deposits

question 107

Multiple Choice

An open market ________ leads to a(n) ________ of reserves and deposits in the banking system and hence to a(n) ________ of the monetary base and the money supply.

• A) sale; expansion; contraction
• B) purchase; expansion; contraction
• C) sale; expansion; expansion
• D) purchase; expansion; expansion

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Definitions:

Labor Dependent

Industries or activities heavily reliant on human labor as a primary input or resource for production.

Monopolistic Competitor

A firm in a market structure where many companies sell products that are similar but not identical, leading to non-price competition.

Revenue-And-Costs

The financial inflows associated with business operations and the expenditures required to generate revenue.

Price

Price is the amount of money expected, required, or given in payment for something, serving as the economic mechanism that balances supply and demand in markets.