If a $1 million open market purchase by the Fed generates a new deposit at a bank that immediately causes the bank's reserves held at the Fed to increase by $1 million,
then the T-account effects are that the bank's assets and liabilities ________ by $1 million and that the Fed's assets and liabilities ________ by $1 million.
A) decline; decline
B) increase; decline
C) decline; increase
D) increase; increase
D
Economics
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Automatic stabilizers are changes in ________ that occur automatically as economic activity changes
A) taxes and transfer payments B) the money supply C) unemployment D) inflation
Economics
If aggregate planned expenditure exceeds real GDP, then
A) unplanned inventory changes are positive. B) real GDP will decrease. C) aggregate planned expenditure must decrease to restore the equilibrium. D) planned inventory changes must be negative. E) unplanned inventory changes are negative.
Economics