A Federal Reserve repurchase agreement involves
A) an agreement by a bank to repay a discount loan on a specific day.
B) an agreement by a dealer to buy back securities she has sold to the Fed.
C) an agreement between the Fed and the Treasury for the Fed to purchase a specified amount of Treasury securities.
D) an agreement by a commercial bank to make a loan to another bank in the federal funds market.
B
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The lawmaking time lag is best described as the time that it takes
A) Congress to realize that new laws must be passed to change taxes or spending. B) a newly passed law to become the norm in daily lives. C) the President to sign a bill sent from Congress. D) a jury to render a verdict. E) Congress to pass laws needed to change taxes or spending.
A situation in which the price of an asset rises significantly above the asset's fundamental value is referred to as
A) asset liquidity. B) dissipation. C) a bubble. D) magnification.
The price elasticity of demand for a rental home in Luxury Resorts in the summer is 1.40 and is 2.60 in the spring. If Luxury Resorts faces a constant marginal cost of $600 per home rental, what is the profit-maximizing peak-load price to charge in the summer?
A) $2,750 B) $2,100 C) $975 D) $1,250
Suppose the Federal Reserve wanted to fight inflation by increasing interest rates. Doing so would
A. decrease aggregate supply. B. decrease aggregate demand. C. increase aggregate supply. D. increase aggregate demand.