Multiple Choice
Which of the following statements is NOT true?
A) The supply of money decreases when the Federal Reserve Banks buy government securities from households or businesses.
B) Excess reserves are the amount by which actual reserves exceed required reserves.
C) Commercial banks increase the supply of money when they purchase government bonds from households or businesses.
D) Commercial bank reserves are an asset to commercial banks but a liability to the Federal Reserve Banks.
Correct Answer:
Verified
Correct Answer:
Verified
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