If the Fed Sells a U

question 235

Multiple Choice

If the Fed sells a U.S. government bond to a bank, what is the effect on the money supply?

• A)​It will increase.
• B)​It will not change.
• C)​It will decrease.
• D)​It will be uncertain.

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Definitions:

General Adaptation Syndrome

A model describing the body's short-term and long-term reactions to stress, consisting of three stages: alarm, resistance, and exhaustion.

Resistance Stage

The second stage of the general adaptation syndrome (GAS), in which the body adapts to a stressor.

Exhaustion Stage

The final stage of the general adaptation syndrome (GAS), in which the body’s ability to resist a stressor has been depleted.

Alarm Stage

The initial phase of the stress response, where the body recognizes a threat and prepares to face or flee from it, activating the fight-or-flight response.