The Federal Open Market Committee (FOMC) enters the market to purchase $10 million in securities. Suppose the Paris First National Bank decides to sell $10 million of the securities it owns to the FOMC; then
a. the Paris First National Bank now has $10 million more in excess reserves at the Fed
b. the Paris First National Bank still has the $10 million government securities but they are held at the Fed
c. this purchase and sale appears as a $20 million increase in the Fed's liabilities to Paris First National Bank
d. the Fed has increased its asset position by $20 million, the bank's liabilities fall by $20 million
e. there is no change to either the Fed or Paris First National Bank's balance sheet, there's just a trade-off of equal value
A
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