Asked by
Allie Warren
on Oct 12, 2024
Verified
Which of the following will increase commercial bank reserves?
A) The purchase of government bonds in the open market by the Federal Reserve Banks
B) An increase in the reserve ratio
C) An increase in the discount rate
D) The sale of government bonds in the open market by the Federal Reserve Banks
Government Bonds
Long-term debt of the federal government.
Commercial Bank Reserves
Funds that commercial banks are required to hold in reserve against deposits, either as cash in their vaults or as deposits with the central bank.
Reserve Ratio
The portion of depositors' balances that banks must have on hand as cash, as required by central banking regulations.
- Become familiar with the strategies the Federal Reserve employs to direct the money supply.
- Attain knowledge about the different instruments utilized in monetary policy, such as open market operations, the discount rate, and reserve requirements.
Verified Answer
JD
Learning Objectives
- Become familiar with the strategies the Federal Reserve employs to direct the money supply.
- Attain knowledge about the different instruments utilized in monetary policy, such as open market operations, the discount rate, and reserve requirements.