The monetary expansion process from an open market operation continues until
A) required reserves are eliminated.
B) the Federal Reserve takes actions to stop the process.
C) the discount rate is lower than market interest rates.
D) unplanned bank reserves are eliminated.

Question

Quizplus · Accepted Answer

The monetary expansion process continues until unplanned bank reserves are eliminated, as banks lend out excess reserves, increasing the money supply until reserves are fully utilized.

The Monetary Expansion Process from an Open Market Operation Continues