A repurchase agreement used to supply reserves on a temporary basis is called a
A)discount loan.
B)special drawing right.
C)system repurchase agreement.
D)policy directive.

Question

Quizplus · Accepted Answer

A repurchase agreement used to supply reserves on a temporary basis is called a system repurchase agreement. This is a tool used by the Federal Reserve to manage the money supply by providing liquidity to banks and financial institutions. It involves the Fed purchasing securities from a bank with an agreement to sell them back at a later date, usually within a week or two. This allows the bank to temporarily increase its reserves, which it can then use to make more loans or meet other obligations.

A Repurchase Agreement Used to Supply Reserves on a Temporary