Federal Reserve liabilities and capital accounts are equal to
A) Federal Reserve assets.
B) gold certificates + Federal Reserve notes.
C) Federal Reserve notes outstanding.
D) bank reserves + government securities.

Question

Quizplus · Accepted Answer

Federal Reserve liabilities and capital accounts are equal to Federal Reserve assets. This is due to the accounting identity of the balance sheet, where assets must always equal liabilities and equity. Thus, the assets held by the Federal Reserve must always equal the sum of its liabilities and capital accounts.

Federal Reserve Liabilities and Capital Accounts Are Equal to