When the Fed Buys Securities from the Public,banks' Reserves ________

question 295

Multiple Choice

When the Fed buys securities from the public,banks' reserves ________ and the quantity of money ________.

• A)increase;increases
• B)increase;decreases
• C)decrease;increases
• D)decrease;decreases
• E)do not change;increases

---

Definitions:

Context Effects

The influence of environmental factors on one's perception or understanding of a stimulus.

Perceptual Set

A readiness to perceive or interpret stimuli in a particular way based on expectations, experiences, emotions, and culture.

Weber's Law

A principle stating that the smallest change in a physical stimulus that can be detected is a constant proportion of the stimulus level.

Masking Stimulus

A stimulus used to interfere with the perception of another stimulus, often used in research to study attention and perception processes.