The Fed closely monitors the Treasury account and takes any changes into consideration in conducting daily open market operations in order to minimize the effect on bank reserves.

Question

Quizplus · Accepted Answer

This statement is correct, as the Fed's daily open market operations involve buying and selling Treasury securities in order to influence the level of bank reserves and control monetary policy. Monitoring the Treasury account helps the Fed to ensure that these operations are conducted in a way that minimizes disruptions to the banking system.

The Fed Closely Monitors the Treasury Account and Takes Any