Which of the following can be used to decrease banking system reserves?
A)a system repurchase agreement
B)open market purchases
C)decrease reserve requirements
D)a reverse repurchase agreement

Question

Quizplus · Accepted Answer

A reverse repurchase agreement involves the sale of securities with the agreement to buy them back at a later date. This action removes reserves from the banking system, as it temporarily transfers money out of the banks in exchange for the securities, thus decreasing banking system reserves.

Which of the Following Can Be Used to Decrease Banking