Which of the Following Increase When the Fed Makes Open

question 11

Multiple Choice

Which of the following increase when the Fed makes open market purchases?

• A)currency and reserves
• B)currency but not reserves
• C)reserves but not currency
• D)neither currency nor reserves

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Definitions:

Acceleration Clause

A clause in a debt instrument (e.g., a mortgage) that requires the payment of the balance of the debt on the happening of a specific event, such as default on an installment payment.

Equitable Mortgage

A mortgage subsequent to the first or legal mortgage. A mortgage of the mortgagor’s equity.

Covenant to Pay

An agreement in a contract where one party promises to pay a specified sum to another.

Original Mortgagor

is the initial borrower who takes out a mortgage loan secured by the property being mortgaged.