Which of the following special lending facilities set up by the Federal Reserve is reserve neutral?
A)Term Auction Facility
B)Primary Dealer Credit Facility
C)Term Securities Lending Facility
D)Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility

Question

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The Term Securities Lending Facility is reserve neutral because it involves the temporary exchange of securities (treasuries) for cash between the Federal Reserve and eligible borrowers, and the securities are returned at the end of the lending period, meaning there is no net change in the level of reserves in the banking system. The other three facilities listed involve the Federal Reserve lending funds to primary dealers or other institutions, which can have an impact on the level of reserves in the banking system.

Which of the Following Special Lending Facilities Set Up by the Federal