If the Fed buys U.S. government bonds from the public, it
A) increases the volume of reserves in the banking system and the money supply tends to grow.
B) decreases the volume of reserves in the banking system and the money supply tends to grow.
C) increases the volume of reserves in the banking system and the money supply tends to fall
D) decreases the volume of reserves in the banking system and the money supply tends to fall.
Answer: A) increases the volume of reserves in the banking system and the money supply tends to grow.
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A) selling; short B) buying; long C) buying; short D) selling; long
The possible returns to a shareholder are:
a. rent and wages. b. fixed interest and dividend. c. fixed interest and a depreciation in the price of the stock. d. rent and fixed interest. e. dividend and an appreciation in the price of the stock.