If a $1 Million Open Market Purchase by the Fed

question 466

Multiple Choice

If a $1 million open market purchase by the Fed generates a new deposit at a bank that immediately causes the bank's reserves held at the Fed to increase by $1 million, then the T-account effects are that the bank's assets and liabilities ________ by $1 million and that the Fed's assets and liabilities ________ by $1 million.

• A) decline; decline
• B) increase; decline
• C) decline; increase
• D) increase; increase

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Definitions:

Mood Contagion

The phenomenon where one person's mood or emotional state is transferred to others around them, influencing the group’s feelings and behaviors.

Type A Orientation

A personality type characterized by competitiveness, impatience, aggression, and a constant sense of urgency, often linked to higher stress levels and achievement orientation.

Authoritarianism

A governing or leadership style characterized by absolute or blind obedience to authority, as opposed to individual freedom and related to centralization of power.

Machiavellianism

A personality trait that involves manipulation and exploitation of others, a lack of morality, and a focus on self-interest and deception.