If the Fed Buys Government Securities from Depository Institutions,the Effect

question 34

Multiple Choice

If the Fed buys government securities from depository institutions,the effect will be to

• A)reduce loans and reduce the money supply.
• B)reduce loans and increase the money supply.
• C)increase loans and reduce the money supply.
• D)increase loans and increase the money supply.
• E)leave both the money supply and the loan balances unchanged.

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