What Happens to the Fed's Balance Sheet When It Buys

question 162

Multiple Choice

What happens to the Fed's balance sheet when it buys $10 billion in government securities?

• A)The left-hand side of the Fed's balance sheet increases by $10 billion.
• B)The left-hand side of the Fed's balance sheet decreases by $10 billion.
• C)The right-hand side of the Fed's balance sheet decreases by $10 billion.
• D)Both the right-hand and left-hand sides of the Fed's balance sheet decrease by $10 billion.
• E)None of these.

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