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Question
The Fed sells $1 million in bonds to a bond dealer. The bond dealerʹs bank experiences
A) a decrease in assets of $1 million as its reserves decrease and an increase in liabilities of $1 million as its deposits rise.
B) a decrease in assets of $1 million as its reserves decrease and a decrease in liabilities of $1 million as its deposits fall.
C) an increase in assets of $1 million as its deposits fell by $1 million, and a decrease in liabilities as its reserves fell by $1 million.
D) no change in assets or liabilities.
Answer
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Related questions
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