Federal reserve notes: A) are assets on the balanace sheet if the fed reserve B)

Question

Federal reserve notes: A) are assets on the balanace sheet if the fed reserve B) enter economy when US financial institutions demand cash from fed reserve C) enter banking system every time the fed reserve sells gov securities D) all are true Question 17 1 pts Federal Reserve Notes: O a. Are assets in the balance sheet of the Federal Reserve. O b. Enter the economy when U.S. financial institutions demand cash from the Federal Reserve. O c. Enter the banking system every time the Federal Reserve sells government securities O d. All the above are truc. O e. None of the above is true. Question 18

Explanation / Answer

Federal reserve notes or simply the Dollar bill is the liability of the federal reserve. It enteres economy when the governor or the federal reserve member banks demand it and when the Fed sells the securities they take away the excess cash from the market and reduce the market supply. The answer is "E". None of the above.  

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