When the Fed Sells a Bond, It

question 24

Multiple Choice

When the Fed sells a bond, it

• A) removes money from circulation, equivalent to the value of the bond.
• B) deposits the money it receives from the sale in one of its member banks.
• C) invests the proceeds in the stock market to aid economic development.
• D) increases the amount of money available to make loans and buy goods.
• E) uses the profits to decrease the federal debt.

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Definitions:

Tennis Player

An individual who actively participates in the sport of tennis, either professionally or as an amateur.

Independent

A term describing a variable that is not affected by the change in another variable in an experiment or study.

Defective Pens

Pens that fail to meet the quality standards due to manufacturing defects, resulting in malfunction or unsatisfactory performance.

Independent

Not influenced by or connected to others; in statistics, refers to variables that do not affect each other.