Multiple Choice
The Fed buys $100 million of government securities from Bank A. What is the effect on Bank A's balance sheet?
A) Securities decrease by $100 million and reserves increase by $100 million.
B) Securities decrease by $100 million and deposits decrease by $100 million.
C) Securities increase by $100 million and reserves decrease by $100 million.
D) Securities increase by $100 million and reserves increase by $100 million.
Correct Answer:
Verified
Correct Answer:
Verified
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