If the Fed Buys Securities on the Open Market,this Will

question 124

Multiple Choice

If the Fed buys securities on the open market,this will

• A)reduce banks' excess reserves.
• B)increases banks' excess reserves.
• C)lower the reserve requirement.
• D)contract the money supply.

---

Definitions:

Initial Cost

The initial expenditure involved in starting a project, acquiring an asset, or initiating an investment.

Annual Cash Flows

The total amount of money being transferred into and out of a business, captured yearly.

Cross-over Rate

The Cross-over Rate is the point at which two different projects or investments have the same net present value or rate of return, used in capital budgeting to compare projects.

Initial Cash Outlay

The total amount of money required upfront to initiate a project, investment, or venture.