When the Fed Buys Government Securities in the Open Market,the

question 65

Multiple Choice

When the Fed buys government securities in the open market,the money supply ________ because ________.

• A)decreases;banks lose liquidity,they make fewer loans and checking account deposits decrease
• B)increases;banks gain liquidity,they make more loans and checking account deposits increase
• C)increases;banks lose liquidity,they make more loans and checking account deposits increase
• D)decreases;banks gain liquidity,they make fewer loans and checking account deposits decrease
• E)none of the above

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Definitions:

Protestant Values

Ethical and moral principles stemming from the Protestant Reformation, emphasizing individual faith, hard work, and reading the Bible.

Capitalism

An economic system characterized by private or corporate ownership of goods and the means of production, with the creation and distribution of goods and services primarily driven by competition in a free market.

Secular Society

A society where religion does not play a central or authoritative role in public or political life, emphasizing separation between religion and state.

Christmas

An annual festival commemorating the birth of Jesus Christ, observed primarily on December 25 as a religious and cultural celebration among billions of people around the world.