If the Fed Sells Government Securities on the Open Market,this

question 296

Multiple Choice

If the Fed sells government securities on the open market,this will cause _____ in the quantity of money available and _____ in the interest rate.

• A)an increase;an increase
• B)a decrease;an increase
• C)an increase;a decrease
• D)a decrease;a decrease

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Definitions:

Temporary Coverage

A provisional or short-term insurance policy providing limited benefits until a more permanent insurance arrangement is implemented.

Insurance Company

An organization that offers risk management in the form of insurance policies to individuals and businesses, compensating for losses in return for premiums.

Coinsurance Clause

A clause in an insurance contract that encourages property owners to insure their property for an amount as close to full value as possible. If the owner insures the property up to a specified percentage—usually 80 percent—of its value, she or he will recover any loss up to the face amount of the policy.

Fire Insurance

A type of property insurance that covers damage or loss to a property due to fire.