Which of the following actions would cause an increase in the level of reserves in the banking system? (A) A customer withdraws funds from Reliable Bank and deposits them in National Bank. (B) The FOMC instructs the NY trading desk to sell government bonds on the open market. (C) The FOMC instructs the NY trading desk to purchase government bonds on the open market. (D) The federal government issues new bonds to finance the budget deficit. The federal government issues new bonds to finance the budget deficit. (E) The federal government pays off bonds that were originally issued to finance the budget deficit.
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