Question 42 When the Fed purchases government securities, it Question 42 options: a) automatically raises the discount rate b) automatically raises the legal reserve requirment c) decreases banks’s reserves and makes possible a decrease in the money supply d) increases banks’ reserves and makes possible an increase in the money supply

Government securities are government borrowing financings that are used to fund everyday activities…

Answered: Question 42 When the Fed purchases…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 42

When the Fed purchases government securities, it

Question 42 options:

a)	automatically raises the discount rate

b)	automatically raises the legal reserve requirment

c)	decreases banks’s reserves and makes possible a decrease in the money supply

d)	increases banks’ reserves and makes possible an increase in the money supply

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