6 of 25 When the Federal Reserve sells a government bond, O money flows from the central bank to individual banks in the economy and decreases the money supply. money flows from the central bank to individual banks in the economy and increases the money supply. O money flows from the individual banks in the economy to the central bank and increases the money supply. money flows from the individual banks in the economy to the central bank and decreases the money supply.
6 of 25 When the Federal Reserve sells a government bond, O money flows from the central bank to individual banks in the economy and decreases the money supply. money flows from the central bank to individual banks in the economy and increases the money supply. O money flows from the individual banks in the economy to the central bank and increases the money supply. money flows from the individual banks in the economy to the central bank and decreases the money supply.
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Money Growth And Inflation
Section: Chapter Questions
Problem 1PA
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![6 of 25
When the Federal Reserve sells a government bond,
O money flows from the central bank to individual banks in the economy and decreases the money supply.
O money flows from the central bank to individual banks in the economy and increases the money supply.
O money flows from the individual banks in the economy to the central bank and increases the money supply.
O money flows from the individual banks in the economy to the central bank and decreases the money supply.
7 of 25
When the Federal Reserve buys back a government bond,
O money flows from the central bank to individual banks in the economy and decreases the money supply.
O money flows from the central bank to individual banks in the economy and increases the money supply.
O money flows from the individual banks in the economy to the central bank and increases the money supply.
O money flows from the individual banks in the economy to the central bank and decreases the money supply.
8 of 25
Problems with a barter system include:
O It does not allow people to enter easily into future contracts.
"O Many goods are perishable.
O Double coincidence of wants is required.
All of the above.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e929138-d2a2-4277-b8a7-dcf106c84cab%2F2ca97580-ff4a-463d-a77a-3c54af6ce1b0%2Fo1ftwmc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:6 of 25
When the Federal Reserve sells a government bond,
O money flows from the central bank to individual banks in the economy and decreases the money supply.
O money flows from the central bank to individual banks in the economy and increases the money supply.
O money flows from the individual banks in the economy to the central bank and increases the money supply.
O money flows from the individual banks in the economy to the central bank and decreases the money supply.
7 of 25
When the Federal Reserve buys back a government bond,
O money flows from the central bank to individual banks in the economy and decreases the money supply.
O money flows from the central bank to individual banks in the economy and increases the money supply.
O money flows from the individual banks in the economy to the central bank and increases the money supply.
O money flows from the individual banks in the economy to the central bank and decreases the money supply.
8 of 25
Problems with a barter system include:
O It does not allow people to enter easily into future contracts.
"O Many goods are perishable.
O Double coincidence of wants is required.
All of the above.
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