To Stabilize the Banking System and Control the Supply of Money

question 66

True/False

To stabilize the banking system and control the supply of money, the Fed requires all banks to maintain a reserve in currency or in deposits with a Federal Reserve Bank.

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Definitions:

Repos

Short for repurchase agreements, a form of short-term borrowing for dealers in government securities.

Federal Funds

Funds in a bank’s reserve account at the Federal Reserve Bank.

SEC Registration

The process by which securities are registered with the Securities and Exchange Commission, a requirement for securities to be legally sold to the public in the United States.