Which of the following is a financial liability for the government?
A) Currency
B) Individuals' deposits in banks that are members of the Fed
C) Excess reserves held by Fed member banks
D) Bonds held at the Fed
E) None of the above

Question

Quizplus · Accepted Answer

Bonds held at the Fed represent a financial liability for the government because they are essentially loans that the government must repay to the bondholders, which in this case includes the Federal Reserve.

Which of the Following Is a Financial Liability for the Government