When the Fed Conducts Open-Market Sales

question 45

Multiple Choice

When the Fed conducts open-market sales,

• A)it sells Treasury securities,which increases the money supply.
• B)it sells Treasury securities,which decreases the money supply.
• C)it auctions term loans,which increases the money supply.
• D)it auctions term loans,which decreases the money supply.

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Definitions:

Demand Curve

A chart that illustrates the connection between a product's cost and the amount of the product customers are prepared to buy at different price levels.

Equilibrium Quantity

The amount of products or services available and sought at the balance price, where the supplied quantity matches the demanded quantity.

Tax Revenue

The revenue collected by governments via taxes, which is allocated to finance public services and meet governmental duties.

Total Tax

The cumulative amount of taxes imposed by a government from various sources, including income, sales, and property taxes.