The Fed sets up the Term Auction Facility when it wants to:
A) inject a certain quantity of reserves into banks.
B) tighten the money supply in the economy.
C) sell a portion of the government bonds it holds.
D) close the discount window.

Question

Quizplus · Accepted Answer

The Term Auction Facility is used by the Fed to inject a certain quantity of reserves into banks. It allows banks to bid on funds for a set period of time, which helps the Fed to control the money supply in the economy.

The Fed Sets Up the Term Auction Facility When It