The Fed buys $100 million of government securities from Bank A. What is the effect on Bank A's balance sheet?
A) Securities decrease by $100 million and reserves increase by $100 million.
B) Securities decrease by $100 million and deposits decrease by $100 million.
C) Securities increase by $100 million and reserves decrease by $100 million.
D) Securities increase by $100 million and reserves increase by $100 million.
Correct Answer:
Verified
Q250: Money is created by
A) government taxation.
B) banks
Q251: When the Fed lowers the federal funds
Q252: The sale of government securities by the
Q253: A bank's required reserves are calculated by
Q254: Which of the following will occur if
Q256: The sale of $1 billion of securities
Q257: If the Fed buys $100,000 in U.S.
Q258: The Fed's purchase of government securities could
A)
Q259: If required reserves are $150 and deposits
Q260: When bank deposits increase from $1 million
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