Chapter_8_Practice_prac_5[1]

Chapter_8_Practice_prac_5[1] - Exam Name_ MULTIPLE CHOICE....

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If the Federal Reserve wants to expand reserves in the banking system, it will 1) _______ A) purchase government securities. B) sell government securities. C) raise reserve requirements. D) raise the discount rate. 2) The Fed is an active participant in money markets mainly because of its responsibility to 2) _______ A) control the money supply. B) assist the Securities and Exchange Commission in regulating the behavior other money market participants. C) increase the interest income of retirees holding money market instruments. D) lower borrowing costs to encourage capital investment. 3) Which of the following statements are true of Treasury bills? 5) _______ A) Occasionally, investors find that earnings on T - bills do not compensate them for changes in purchasing power due to inflation. B) The market for Treasury bills is extremely deep and liquid.
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This note was uploaded on 09/07/2011 for the course FIN 353 taught by Professor Cobus during the Spring '08 term at S.F. State.

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Chapter_8_Practice_prac_5[1] - Exam Name_ MULTIPLE CHOICE....

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