When the Fed purchases government securities, it
A. increases banks' reserves and makes possible an increase in the money supply.
B. decreases banks' reserves and makes possible a decrease in the money supply.
C. automatically raises the discount rate.
D. uses discounting operations to influence margin requirements.
e. has no effect on either the money supply or the discount rate.
increases banks' reserves and makes possible an increase in the money supply
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Suppose we plot the total revenue curve with quantity on the horizontal axis and revenue on the vertical axis (as in Figure 8.1 in the book). Under price-taking behavior, the total revenue curve should be:
A) an inverted U-shaped curve (first increasing and then decreasing). B) a U-shaped curve (first decreasing and then increasing). C) a horizontal line with vertical axis intercept equal to the market price. D) a straight line from the origin with slope equal to the market price.
Since 1970, the federal government budget has never been in surplus
a. True b. False Indicate whether the statement is true or false