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    Macroeconomics Study Set 68
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    Exam 16: Interest Rates and Monetary Policy
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    If the Fed Buys $1 Million in Government Securities from Bank
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If the Fed Buys $1 Million in Government Securities from Bank

Question 305

Question 305

Multiple Choice

If the Fed buys $1 million in government securities from Bank A, then the immediate effect of this transaction is an increase in


A) money supply M1.
B) Bank A's excess reserves.
C) Bank A's liabilities.
D) Bank A's required reserves.

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