When a bank repays a _________________ loan,the Fed _____________________ the bank's reserve account.
A) overnight; subtracts the repayment from
B) overnight; adds the repayment to
C) discount; adds the repayment to
D) discount; subtracts the repayment from

Question

Quizplus · Accepted Answer

When a bank repays a discount loan, the Federal Reserve subtracts the repayment from the bank's reserve account, effectively reducing the amount of reserves the bank has on deposit with the Fed.

When a Bank Repays a _________________ Loan,the Fed _____________________ the Bank's

When a Bank Repays a _ Loan,the Fed _____ the Bank's