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    Economics Principles and Policy Study Set 2
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    Exam 29: Monetary Policy: Conventional and Unconventional
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    When the Fed Purchases Government Securities from a Commercial Bank
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When the Fed Purchases Government Securities from a Commercial Bank

Question 26

Question 26

Multiple Choice

When the Fed purchases government securities from a commercial bank, the bank


A) loses its ability to make loans.
B) automatically becomes poorer.
C) loses equity in the Fed.
D) receives reserves that can be loaned out.

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