When the Fed Purchases Securities, the Total Funds of Commercial

question 59

Multiple Choice

When the Fed purchases securities, the total funds of commercial banks ____ by the market value of securities purchased by the Fed. This activity initiated by the FOMC's policy directive is referred to as a(n) ____ of money supply growth.

• A)increase; loosening
• B)decrease; tightening
• C)decrease; loosening
• D)increase; tightening
• E)none of the above

---

Definitions:

Mills Company

A general term for businesses involved in the manufacturing sector, particularly those related to textiles, grains, or paper production.

Parallelism

A writing or speaking technique where parts of a sentence have the same or similar grammatical structure.

Production Facilities

Industrial sites or buildings where goods are manufactured or assembled.

Consumer Demands

The needs or desires of consumers for products or services that drive the market demand.