1) Open market operations are the:

A) buying and selling of Federal Reserve Notes in the open market.

B) means by which the Fed acts as the government's banker.

C) buying and selling of government securities by the Treasury.

D) means by which the Fed supplies the economy with currency.

E) buying and selling of government securities by the Fed.

2) When the Fed increases the required-reserve ratio, a bank':

A) required reserves are unaffected.

B) required reserves are increased.

C) required reserves are decreased.

D) excess reserves are decreased.

E) B and D

3) When the Fed sells government securities to a bank:

A) the bank's assets and liabilities decrease by the amount of the sale.

B) the bank's assets and liabilities increase by the amount of the sale.

C) the magnitude of the bank's assets is unaffected by the sale, and only the composition is affected.

D) the bank's liabilities are unaffected by the sale.

E) C and D