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If the Fed Buys a U

Question 21

Multiple Choice

If the Fed buys a U.S. government bond from a member of the public,


A) ​the banking system has more reserves and the money supply tends to grow.
B) ​the banking system has less reserves and the money supply tends to grow.
C) ​the banking system has more reserves and the money supply tends to fall.
D) ​the banking system has less reserves and the money supply tends to fall.

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