When the Federal Reserve Sells a Government Security to a Bond

question 46

Multiple Choice

When the Federal Reserve sells a government security to a bond dealer, which transmits payment from a transactions deposit account at a bank

• A) the cash of the Federal Reserve will decrease.
• B) the net worth of the commercial bank will decrease.
• C) the loans of the commercial bank will increase.
• D) the money supply will decrease.

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Definitions:

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