Author Question: When the Federal Reserve sells government bonds to the public, it: a. increases the M1 money supply ... (Read 67 times)

jilianpiloj · **on:** Jun 30, 2018

When the Federal Reserve sells government bonds to the public, it:
a. increases the M1 money supply and increases the reserves of the commercial banking system.
b. increases the M1 money supply, while reducing the reserves of the commercial banking system.
c. reduces the M1 money supply, while increasing the reserves of the commercial banking system.
d. reduces the M1 money supply and decreases the reserves of the commercial banking system.

Question 2

Infrastructure investment appears to have little impact on economic growth and development.
a. True
b. False
Indicate whether the statement is true or false