When Federal Reserve Banks add to their holdings of government securities,
A) commercial banks must reduce their net lending.
B) commercial bank reserves increase.
C) the Fed is extending less credit to the economy.
D) the stock of money declines.
B
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Caroline has saved $100,000 for her retirement. She earned 4 percent interest on that money during the year 2013. If the inflation rate was 1 percent in 2013, what was Caroline's real interest rate?
A) $4,000 B) 5 percent C) 1 percent D) 4 percent E) 3 percent
New York Times writer Michael Lewis wrote that "The sad truth, for investors, seems to be that most of the benefits....are passed through to consumers free of charge." To which of the following did Lewis refer?
A) the Enron accounting scandal B) apple farming in New York state C) new technologies developed in the 1990s D) the medical screening industry