Author Question: When the Fed sells government securities in the open market, the money supply ________ because ... (Read 42 times)

@Brianna17 · **on:** Jun 30, 2018

When the Fed sells government securities in the open market, the money supply ________ because ________.

A) decreases; banks lose liquidity, they make fewer loans and checking account deposits decrease
B) increases; banks gain liquidity, they make more loans and checking account deposits increase
C) increases; banks lose liquidity, they make more loans and checking account deposits increase
D) decreases; banks gain liquidity, they make fewer loans and checking account deposits decrease
E) none of the above

Question 2

Leisure includes all of the following except

A) sleep.
B) home yardwork.
C) market work.
D) recreational activities.