Suppose that the Treasury decides to spend $12 billion on a given day
Because about $12 billion in new tax revenues are expected to replenish the Treasury's account at the Fed a week later, the best policy for the Fed to pursue if it wishes to stabilize reserves is to A) do a $12 billion government security repurchase agreement.
B) do a $12 billion government security reverse repurchase agreement.
C) buy $12 billion in government securities outright and hold them to prevent bank reserves from falling.
D) sell $12 billion in government securities to prevent bank reserves from rising.
B
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Market failure occurs when resources are misallocated.
Answer the following statement true (T) or false (F)
If your wage increases from $10 per hour to $15 per hour, then your
a. opportunity cost of an hour of leisure decreases by $5 per hour. b. opportunity cost of an hour of leisure increases by $5 per hour. c. out-of-pocket cost of an hour of leisure decreases by $5 per hour. d. out-of-pocket cost of an hour of leisure increases by $5 per hour.