When the Fed Conducts Open-Market Purchases

question 17

Multiple Choice

When the Fed conducts open-market purchases,

• A)it buys Treasury securities,which increases the money supply.
• B)it buys Treasury securities,which decreases the money supply.
• C)it borrows money from member banks,which increases the money supply.
• D)it lends money to member banks,which decreases the money supply.

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Definitions:

Link Method

A mnemonic strategy that involves forming a mental image connecting the items in a list to remember them more easily.

Mental Image

A representation of sensory experience held in the mind, which can be recalled or manipulated.

Acronym Method

A mnemonic device that involves using the initials of information to be remembered to form a word or phrase.

Link Method

A memory technique where you visualize items to be remembered in a way that they are linked together by a story or association.