An increase in U.S. Treasury deposits at the Fed reduces both ________ and the ________.

Name: An increase in U.S. Treasury deposits at the Fed reduces both ________ and the ________.
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An increase in U.S. Treasury deposits at the Fed reduces reserves because the Treasury is essentially moving money from commercial banks (where it counts as reserves) to the Fed. This action also reduces the monetary base, which includes reserves among its components.

An Increase in U