When the Fed Sells U

question 109

Multiple Choice

When the Fed sells U.S.government securities to a member bank,the immediate effect on that bank's balance sheet is a(n) :

• A)decrease in assets and an increase in liabilities.
• B)increase in assets and a decrease in liabilities.
• C)increase in both assets and liabilities.
• D)decrease in both assets and liabilities.
• E)change in the type of assets the bank is holding,but no change in liabilities.

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Definitions:

World

The planet Earth and all its inhabitants, countries, ecosystems, and human-made environments, considered as a whole.

Savings And Loan Associations

Entities dedicated to receiving savings deposits and extending credit through mortgages and different loan forms.

Financial Hot Water

A term used colloquially to describe a situation where an individual or organization is experiencing financial difficulty or distress.

Fixed Rate Mortgages

A type of mortgage loan where the interest rate remains the same throughout the term of the loan, providing predictability in payments.