15. When the Fed sells government securities to the banks, how does it usually r
ID: 1214351 • Letter: 1
Question
15.When the Fed sells government securities to the banks, how does it usually receive payment for the securities?
a.
by accepting checks on bank accounts
b.
by drawing money out of circulation
c.
by decreasing member bank profits not distributed by the Fed
d.
by decreasing reserves in bank accounts at the Fed
a.
by accepting checks on bank accounts
b.
by drawing money out of circulation
c.
by decreasing member bank profits not distributed by the Fed
d.
by decreasing reserves in bank accounts at the Fed
Explanation / Answer
WHEN THE FED SELLS GOVERNMENT SECURITIES TO THE BANKS, IT USUALLY RECEIVES PAYMENT FOR THE SECURITIES BY WAY OF DECREASING RESERVES IN BANK ACCOUNTS AT THE FED.
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