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When the Fed Sells Government Securities,ceteris Paribus,the Money Supply Shifts

question 101

Multiple Choice

When the Fed sells government securities,ceteris paribus,the money supply shifts to the ________ and the equilibrium interest rate ________.


Definitions:

Compensating Variation

An economic concept representing the monetary amount needed to compensate an individual for a price change or policy effect, keeping utility constant.

Equivalent Variation

A measure of the change in wealth needed to maintain a consumer's utility level constant before and after a price change.

Price Decreases

A reduction in the cost at which goods and services are sold in the market.

Net Seller

An individual or entity that sells more of a security, commodity, or other assets than they buy in a given period.

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