AP Econ Ch 15
The Federal Reserve Banks buy government securities from commercial banks. As a result, the checkable deposits:
of commercial banks are unchanged, but their reserves increase
The commercial banking system borrows from the Federal Reserve Banks. As a result, the checkable deposits:
of commercial banks are unchanged, but their reserves increase
Which of the following is a tool of monetary policy?
open market operations
Which of the following is an asset on the consolidated balance sheet of the Federal Reserve Banks?
loans to commercial banks
Commercial banks and thrifts usually hold only small amounts of excess reserves because:
the Fed does not pay interest on reserves.
The securities held as assets by the Federal Reserve Banks consist mainly of:
Treasury bills and Treasury bonds.
Federal Reserve Notes in circulation are
a liability as viewed by the Federal Reserve Banks
Reserves must be deposited in the Federal Reserve Banks by:
all depository institutions, that is, all commercial banks and thrift institutions
The Federal Reserve Banks sell government securities to the public. As a result, the checkable deposits
and reserves of commercial banks both decrease
When a commercial bank borrows from a Federal Reserve Bank
the commercial bank's lending ability is increased
Which of the following will increase commercial bank reserves?
the purchase of government bonds in the open market by the Federal Reserve Banks