Suppose Trust Bank has $500 million in assets and $400 million in liabilities. The Fed purchases $45 million in bonds from the bank. Which of the following is a likely consequence of the Fed's action?

a. An increase in the bond holdings of Trust Bank by $45 million and a decrease in the bank's reserves by $45 million
b. A decrease in both the bond holdings and reserves of Trust Bank by $45 million
c. An increase in both the bond holdings and reserves of Trust Bank by $45 million
d. A decrease in the bond holdings of Trust Bank by $45 million and an increase in the bank's reserves by $45 million


d

Economics

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