Other things being equal, when the Fed buys U.S. government ...

[Davideckstein7]

Other things being equal, when the Fed buys U.S. government securities
 
  A) the quantity of paper currency and coins in circulation expands by more than the amount of the Fed's purchase.
  B) the Fed's total assets and total liabilities immediately expand by exactly the amount of the Fed's purchase.
  C) the U.S. Treasury must immediately issue new securities to replace the securities that the Fed has removed from the market.
  D) the quantity of deposits in the U.S. banking system expands by less than the amount of the Fed's purchase.

Question 2

The period for which the Consumer Price Index is defined to equal 100 is called the
 
  A) base period.
  B) starting point.
  C) beginning period.
  D) zero period.
  E) reference base period.

[DHRUVSHAH]

Answer to Question 1

B

Answer to Question 2

E