Author Question: When the Fed buys government securities in the open market, the money supply ________ because ... (Read 86 times)

CQXA · **on:** Jun 30, 2018

When the Fed buys 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

The most severe financial crisis in U.S history occurred in the years ________.

A) 2006-2008
B) 1997-98
C) 1929-33
D) 1873-93