Author Question: The Fed buys 100 million of government securities from Bank A. What is the effect on Bank A's ... (Read 72 times)

shenderson6 · **on:** Jun 29, 2018

The Fed buys 100 million of government securities from Bank A. What is the effect on Bank A's balance sheet?

A) Securities decrease by 100 million and reserves increase by 100 million.
B) Securities decrease by 100 million and deposits decrease by 100 million.
C) Securities increase by 100 million and reserves decrease by 100 million.
D) Securities increase by 100 million and reserves increase by 100 million.

Question 2

All of the following lead to more rapid economic growth EXCEPT

A) restricting international trade.
B) encouraging higher rates of saving.
C) supporting more research and development.
D) encouraging higher quality education.