When the Fed Purchases Government Securities from a Commercial Bank

question 109

Multiple Choice

When the Fed purchases government securities from a commercial bank, the bank:

• A)​automatically becomes poorer.
• B)​loses equity in the Fed.
• C)​receives reserves that can be used to make additional loans.
• D)​loses its ability to make loans.

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Definitions:

Organizational Design

The process of shaping an organization's structure and roles to align with business objectives and strategy, facilitating efficiency and effectiveness.

Politics Of The Firm

Describes the internal dynamics, power struggles, and alliances within an organization that influence its decisions and functioning.

Technology Type

A categorization of technology based on its functionality, application, or the innovation it represents within a particular field.

Banks

Financial institutions that accept deposits from the public, offer savings and loans services, and play a critical role in the financial system.