Which of the Following Statements Is True When the Fed

question 11

Multiple Choice

Which of the following statements is true when the Fed increases reserves by buying a government bond from a bank?

• A)The amount of reserves in the banking system will increase by an amount greater than the amount of the bond purchase.
• B)The amount of loans made by the banking system will increase by the amount of the bond purchase.
• C)The amount of loans made by that bank will be greater than the increase in reserves.
• D)The amount of deposits made by the banking system will increase by the amount of the bond purchase.
• E)The amount of reserves in the banking system will increase by the amount of the bond purchase.

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Definitions:

Self-control

The ability to regulate one's emotions, thoughts, and behaviors in the face of temptations and impulses.

Stressors in Everyday Life

Events or conditions in one's daily life that trigger stress responses.

Behavior Modification

A systematic approach to changing behavior through the application of the principles of conditioning.

Conditioning

A process of behavior modification by which a subject comes to associate a desired behavior with a previously unrelated stimulus.