If the Fed Purchases U

question 127

Multiple Choice

If the Fed purchases U.S. government securities in the open market, all of the following would occur EXCEPT

• A) an expansion of the money supply.
• B) an increase in investment.
• C) a fall in bond prices.
• D) an increase in real Gross Domestic Product (GDP).

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Definitions:

Per-Capita Consumption

The average consumption of goods or services per person within a specific population or area.

Population

The sum of individuals living in a specific region or nation.

Total Fertility Rate

The typical amount of children a woman is expected to have throughout her life, based on present fertility rates.

Replacement Rate

The ratio of a retiree's pension benefit to their earning before retirement, often used to measure the adequacy of retirement income.