Multiple Choice
Assume the Treasury borrows $5 billion from the non-bank public and spends it. The effect on bank reserves is that they will __________ by $5 billion when the Treasury borrows and then bank reserves will __________ by $5 billion when the Treasury spends the money.
A) rise; fall
B) fall; rise
C) rise; rise
D) fall; fall
Correct Answer:
Verified
Correct Answer:
Verified
Q1: A gold sale by the U.S. Treasury<br>A)
Q2: If the government collects taxes to pay
Q3: A Treasury expenditure financed through borrowing from
Q4: U.S. Treasury deposits at the Fed are<br>A)
Q6: The largest item on the liability side
Q7: A severe storm that slows postal delivery
Q8: Bank reserves will decrease if<br>A) Fed liabilities
Q9: If the federal government collects $10 billion
Q10: Repos and reverse repos are<br>A) permanent injections
Q11: If the Treasury finances an expenditure by