When the Fed Purchases Securities, the Total Funds of Commercial

Multiple Choice

When the Fed purchases securities, the total funds of commercial banks ____ by the market value of  the securities purchased by the Fed. This activity initiated by the FOMC's policy directive is referred to as a ____ of money supply growth.

A) increase; loosening
B) decrease; tightening
C) decrease; loosening
D) increase; tightening
E) None of these are correct.