Bank reserves will increase over time when:
A) the Fed sells government securities on the open market.
B) the Treasury sells government securities on the open market.
C) depositors take funds out of their checkable deposit accounts.
D) the Fed buys government securities on the open market.
E) the Fed lowers the discount rate.

Question

Quizplus · Accepted Answer

Bank reserves increase when the Fed buys government securities on the open market. This increases the amount of reserves available to banks, which can then increase their lending and contribute to economic growth.

Bank Reserves Will Increase Over Time When