When the Fed Buys Treasury Bills from the Public, Which

question 63

Multiple Choice

When the Fed buys Treasury bills from the public, which of the following may be the case?

• A)it pays with funds created out of thin air
• B)it pays with a check drawn on itself
• C)it pays by using U.S. Treasury gold certificates
• D)it pays both with funds created out of thin air and with a check drawn on itself

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Definitions:

Products

Goods or services that are created through a process and offered in the market to satisfy consumer needs or wants.

Services

Intangible products offered to consumers, involving human or mechanical efforts to fulfill needs or wants.

Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment, focusing on cash flows rather than profitability or cost of capital.

Bias Towards Liquidity

A preference or inclination for holding or investing in liquid assets, usually due to concerns about future cash needs or market volatility.