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:

Basic Accounting Equation

The fundamental equation representing the relationship between a company's assets, liabilities, and equity; Assets = Liabilities + Equity.

Assets

Resources owned by a company that have economic value and can be converted into cash.

Liabilities

Financial obligations or debts that a company owes to external parties.

Residual Equity

The amount of equity remaining for shareholders after all liabilities have been deducted from total assets.