The Fed buys $100 million of government securities from Bank A. What is the effect on Bank Aʹs balance sheet?
A) Securities increase by $100 million and reserves increase by $100 million.
B) Securities increase by $100 million and reserves decrease by $100 million.
C) Securities decrease by $100 million and deposits decrease by $100 million.
D) Securities decrease by $100 million and reserves increase by $100 million.
Correct Answer:
Verified
Q253: The Fed buys $100 million of government
Q254: A bank creates money by
A) lending its
Q255: The Fedʹs purchase of government securities will
A)
Q256: The majority of money is created when
A)
Q257: The sale of $1 billion of securities
Q259: When the Fed sells one million dollars
Q260: The initial impact of the Fedʹs open
Q261: A bankʹs required reserves are calculated by
Q262: A small commercial bank has $10,000 in
Q263: The banking system in the United States
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents