How are the operations of the Federal Reserve financed?
What will be an ideal response?
Most of the Fed's earnings come from interest on the securities it holds, with smaller amounts coming from interest on discount loans and fees that are received from financial institutions for check-clearing and other services.
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A nation with an official settlements balance of -$100 billion is likely to experience a:
A) balance of payments surplus and accumulate $100 billion in international reserves B) balance of payments deficit and accumulate $100 billion in international reserves C) balance of payments surplus and a decline of $100 billion in international reserves D) balance of payments deficit and a decline of $100 billion in international reserves
Which of the following events would result in a greater demand for U.S. dollars in the foreign exchange market, ceteris paribus?
A. Higher tariffs imposed by the United States on imports. B. An increase in interest rates in the United States. C. Higher quotas imposed by the United States on imports. D. An increase in interest rates in Japan.