When the Fed purchases Treasury securities, the account balances of the investors who sell their securities to the Fed _________, and there are _________ in the account balances of other financial institutions.

Question

Quizplus · Accepted Answer

When the Fed purchases Treasury securities, it credits the reserve accounts of the banks where the sellers have their accounts, leading to an increase in the sellers' account balances without causing offsetting decreases elsewhere.

When the Fed Purchases Treasury Securities, the Account Balances of the Investors