The immediate effect of a member bank's sale of U.S. government securities to the Fed is
a. an increase in that bank's required reserves.
b. a decrease in that bank's required reserves.
c. an increase in that bank's excess reserves.
d. a decrease in that bank's excess reserves.
C
You might also like to view...
Explain how the production possibilities frontier illustrates scarcity
What will be an ideal response?
How effective is discount policy as compared to open market operations in managing the money supply? Explain how The Federal Reserve uses discount policy today
What will be an ideal response?
The process of achieving a quality of life in a country that is comparable to that found in a modern economy is called ________
A) economic development B) economic modernization C) comparative advantage D) industrial growth
If there is an excess demand for bonds at a given price of bonds, then
A) the interest rate will fall. B) the interest rate will rise. C) the price of bonds will fall. D) the interest rate may rise or the interest rate may fall depending upon the reasons for the excess demand for bonds.