Identify the correct statement.
A)District banks of the Fed hold reserves in the form of deposits at the Fed.
B)Commercial banks in each district make loans to the Fed.
C)The Fed sells U.S.government securities for the U.S.Treasury.
D)The district banks of the Fed print money and supply currency to the Fed.
E)The Fed holds the reserves of the commercial banks but it does not issues checks.

Question

Quizplus · Accepted Answer

The Federal Reserve sells U.S. government securities on behalf of the U.S. Treasury as part of its open market operations to manage the money supply and interest rates.

Identify the Correct Statement