Assume that Merrill Lynch, a government securities dealer, sells T-bills to First Central Bank with a promise to buy the T-bills back the next day. This agreement is known as a

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This agreement is known as a repurchase agreement, where one party sells securities with the promise to buy them back at a later date, often the next day, at a predetermined price.

Assume That Merrill Lynch, a Government Securities Dealer, Sells T-Bills