The Fed Conducts an Open Market Operation and Buys $50,000

question 48

Essay

The Fed conducts an open market operation and buys $50,000 of government securities from Commerce Bank.The desired reserve ratio is 25 percent.What is the change in Commerce Bank's total reserves and its excess reserves?

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Definitions:

European Colonies

Territories under the political and economic control of European countries, established mainly from the 16th to the 20th century in Africa, the Americas, Asia, and Oceania.

Africa and Asia

Two continents that have been significantly influenced and shaped by processes of colonialism, imperialism, and various forms of resistance and decolonization.

Western Front

Specifically pertaining to World War I, it was the primary theater of war during the conflict, marked by a line of trenches stretching from the North Sea to the Swiss frontier with France.

Mutinies

Acts of open rebellion against the proper authorities, especially by soldiers or sailors against their commanding officers.