When the Fed buys $250 million of Treasury bills from commercial banks, the banks' reserves increase by less than $250 million.

Name: When the Fed buys $250 million of Treasury bills from commercial banks, the banks' reserves increase by less than $250 million.
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When the Fed buys Treasury bills from commercial banks, the banks' reserves increase by the full amount of the purchase, which is $250 million in this case.

When the Fed Buys $250 Million of Treasury Bills from Commercial