If the Fed Wants to Temporarily Drain Reserves from the Banking

question 21

Multiple Choice

If the Fed wants to temporarily drain reserves from the banking system,it will engage in

• A) a repurchase agreement.
• B) a matched sale-purchase transaction.
• C) a "pump" agreement.
• D) none of the above.

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Definitions:

Eliminate Intra-entity Transfer

The process of removing transactions between entities within a single organization from the consolidated financial statements to prevent double counting.

Intra-entity Transfer

Transactions involving assets, services, or funds between units or divisions within the same legal entity.

Consolidated Income Statement

A financial statement that presents the overall income of a corporation and its subsidiaries as a single entity.

Deferred

In finance, this term refers to transactions or events that are postponed to a future date.