In examining two variables, we find that as one variable changes, the other changes. These variables are said to be

Selling government bonds through open market operations allows the Federal Reserve to

A) decrease money in the Treasury. B) receive a high rate of interest on the bonds. C) decrease the money supply in the private sector. D) receive discounts on future sales.

The Fed buys $50,000 of government securities. The desired reserve ratio is 10 percent and the currency drain ratio is zero. What will be the change in the quantity of money?

A) $0 B) $5,000 C) $50,000 D) $5,000,000 E) $500,000