Repurchase agreements are purchased by the Fed to _________ the aggregate level of bank funds.
A)temporarily decrease
B)permanently increase
C)permanently decrease
D)temporarily increase

Question

Quizplus · Accepted Answer

Repurchase agreements (repos) are used by the Federal Reserve to temporarily increase the aggregate level of bank funds. They are short-term agreements to purchase securities with the promise to sell them back at a slightly higher price, effectively injecting liquidity into the banking system.

Repurchase Agreements Are Purchased by the Fed to _________ the Aggregate