Which of the Following Statements Is NOT True

question 18

Multiple Choice

Which of the following statements is NOT true?

• A)The supply of money decreases when the Federal Reserve Banks buy government securities from households or businesses.
• B)Excess reserves are the amount by which actual reserves exceed required reserves.
• C)Commercial banks increase the supply of money when they purchase government bonds from households or businesses.
• D)Commercial bank reserves are an asset to commercial banks but a liability to the Federal Reserve Banks.

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Definitions:

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