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If the Fed Buys Government Securities from Depository Institutions,the Effect

Question 34

Multiple Choice

If the Fed buys government securities from depository institutions,the effect will be to


A) reduce loans and reduce the money supply.
B) reduce loans and increase the money supply.
C) increase loans and reduce the money supply.
D) increase loans and increase the money supply.
E) leave both the money supply and the loan balances unchanged.

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