If the Fed Buys a U

question 21

Multiple Choice

If the Fed buys a U.S. government bond from a member of the public,

• A)​the banking system has more reserves and the money supply tends to grow.
• B)​the banking system has less reserves and the money supply tends to grow.
• C)​the banking system has more reserves and the money supply tends to fall.
• D)​the banking system has less reserves and the money supply tends to fall.

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Definitions:

Lack of Funds

A situation where there is an insufficient amount of financial resources available to meet the demands or objectives of a project or entity.

Poor Business Concept

Refers to a business idea that lacks viability, market potential, or uniqueness, often leading to failure.