If the Fed Buys a U

question 126

Multiple Choice

If the Fed buys a U.S.Treasury bill from a member of the public, the banking system has

• A)less reserves and the money supply tends to fall.
• B)more reserves and the money supply tends to fall.
• C)less reserves and the money supply tends to grow.
• D)more reserves and the money supply tends to grow.

---

Definitions:

Bank Statement

A monthly document provided by a bank detailing all transactions in an account, which can include deposits, withdrawals, service charges, and interest earned.

NSF Check

A check that a bank has declined to honor because the account on which it was drawn does not have sufficient funds.

EFT Deposit

Stands for Electronic Funds Transfer deposit, a method of transferring money directly from one bank account to another electronically.

Service Charge

A fee collected to pay for services related to the primary product or service being purchased, often added to bills in restaurants, banking, and lodging industries.