When the Fed Sells Bonds,the Quantity of Reserves in the Banking

question 47

True/False

When the Fed sells bonds,the quantity of reserves in the banking system declines and the money supply decreases.

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Definitions:

Subsidiary Ledger

A subsidiary ledger is a group of detailed accounts where their totals tie into and support summary amounts in one or more accounts in the general ledger.

General Ledger

A comprehensive collection of a company's accounts and transactions, serving as the foundation of the accounting system.

Controlling Account

The account in the general ledger that summarizes the balances of the accounts in a subsidiary ledger.

Purchases Journal

The purchases journal is a financial record keeping system where a business logs all purchases of inventory on credit, excluding cash purchases.