The More Funds That the Federal Reserve Makes Available for Banks

question 67

Multiple Choice

The more funds that the Federal Reserve makes available for banks to borrow through the Term Auction Facility, the _____ the monetary base and the _____ the money supply.

• A) smaller; smaller
• B) smaller; greater
• C) greater; greater
• D) greater; smaller

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Definitions:

Total Assets

The sum of all resources owned or controlled by a company, valued in terms of money, which can be used to produce goods or services.

Investment Account

A financial account held at a bank or brokerage used to buy, sell, and hold securities like stocks, bonds, and mutual funds.

Consolidated Dividends

Dividends paid by a parent company that include those received from and paid out to its subsidiaries.

Amortization

The gradual reduction of the book value of an intangible asset or loan balance over time through regular payments.