Which of the Following Statements Is Correct

question 221

Multiple Choice

Which of the following statements is correct?

• A) Excess reserves may be found by subtracting actual from required reserves.
• B) The supply of money declines when the public purchases securities from commercial banks.
• C) Commercial bank reserves are a liability to commercial banks but an asset to Federal Reserve Banks.
• D) Commercial banks reduce the supply of money when they purchase government bonds from the public.

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