If the Fed Purchases Securities in the Amount of $100,000

question 101

Multiple Choice

If the Fed purchases securities in the amount of $100,000 from First Union Bank, then the

• A)assets of First Union Bank decrease by $100,000.
• B)assets of the Fed decrease by $100,000.
• C)assets of First Union Bank change in composition but not in the amount.
• D)liabilities of the Fed change in composition but not in amount.
• E)liabilities of First Union decrease by $100,000.

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Definitions:

Redundant Controls

Systems or mechanisms put in place to act as backup or fail-safes in order to ensure continuous operation and enhance safety.