If the Fed buys U.S.government securities from a bank and credits the bank's reserve account,

Question

Quizplus · Accepted Answer

When the Fed buys U.S. government securities from a bank and credits the bank's reserve account, it increases the bank's reserves which in turn increases the money supply. This process is known as open market operations and is a tool used by the Fed to influence the economy. Since the Fed is buying assets, its assets increase.

If the Fed Buys U