When the Fed sells government securities to a bank, how are the Fedʹs assets affected?
A) The amount of the Fedʹs government securities decreases.
B) The amount of reserves held at the Fed increases.
C) The amount of the Fedʹs government securities increases.
D) The amount of reserves held at the Fed decreases.

Question

Quizplus · Accepted Answer

When the Fed sells government securities to a bank, it receives money in exchange for the securities, which decreases the amount of the Fed's government securities.

When the Fed Sells Government Securities to a Bank, How