When the Fed Uses Open Market Operations by Selling Some

question 35

Multiple Choice

When the Fed uses open market operations by selling some of its Treasury securities to investors in the U.S., there will be

• A)an outward shift in the supply schedule of loanable funds.
• B)an inward shift in the supply schedule of loanable funds.
• C)no shift in the supply schedule of loanable funds.
• D)an outward shift in the demand schedule for loanable funds.

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Definitions:

New Pressure

A term referring to the stress or urgency of a situation, or in a scientific context, the change in the force exerted by a fluid per unit area.

Expanded

Increased in volume or size, often by the introduction of air or in response to heat.

New Pressure

An unspecified or novel force applied uniformly over a surface, measured typically in units such as pascals.

Compressed

Subjected to increased pressure or compacted into a smaller volume.