The Fed buys $100 million of government securities from Bank A. What is the effect on Bank A's balance sheet?
A) Securities decrease by $100 million and reserves increase by $100 million.
B) Securities decrease by $100 million and deposits decrease by $100 million.
C) Securities increase by $100 million and reserves decrease by $100 million.
D) Securities increase by $100 million and reserves increase by $100 million.
A
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Many fast-food restaurants have signs on their cash registers that read, "Your meal is free if the cashier does not give you a receipt". What might be the purpose of such a sign? Hint: there is a moral hazard problem here
What will be an ideal response?
Market supply is found by
A) horizontally summing each individual producer's average total cost curve. B) vertically summing the relevant part of each individual producer's marginal cost curve. C) horizontally summing the relevant part of each individual producer's marginal cost curve. D) vertically summing each individual producer's average total cost curve.