Question: A . What is the Fed is buying? _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

A. What is the Fed is buying? _______________________.
B. Where does the Fed get the money to make an open market buy? ______________________.
C. When the FED transfers this money to the securities dealer, how will this action initially effect the overall amount of reserve deposit accounts within the banking system?_________________.(they rise/they fall)
D. How will this initial change in reserve accounts within the banking system affect the overall lending behavior of banks within the banking system? ___________________.(lend more / lend less)
E. As banks change their lending behavior and as people borrow money, the creation of additional deposit accounts in the banking system will increase. What should continue to happen to deposit accounts within the banking system? ______________________.(they increase / they decrease)
F. By changing the level of reserve accounts and consequently the lending behavior of commercial banking institutions, the Feds open market buy will________________(increase/decrease) the money supply by ____________________(more/less) than the original increase in banking reserves due to the open market buy.

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