An increase in the assets of Federal Reserve banks
A) decreases the monetary base.
B) increases the monetary base.
C) has no effect on monetary base.
D) always decreases another Federal Reserve Bank asset.

Question

Quizplus · Accepted Answer

An increase in the assets of Federal Reserve banks typically means an increase in their holdings, such as securities or loans, which increases the monetary base by adding to the reserves in the banking system.

An Increase in the Assets of Federal Reserve Banks