When the Fed sells a government security to the public, how does it usually receive payment for the security?
A)By accepting checks on bank accounts
B)By drawing money out of circulation
C)By decreasing member bank profits not distributed by the Fed
D)By decreasing reserves in bank accounts at the Fed

Question

Quizplus · Accepted Answer

The Fed usually receives payment by accepting checks on bank accounts. The purchaser writes a check from their bank account to the Fed, and the funds are transferred accordingly.

When the Fed Sells a Government Security to the Public