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76. c. the magnitude of the Fed's assets is unaffected by the sale, and only the composition is affected. It is the central bank of the U.S. and also acts as a fiscal agent for the U.S. Treasury. A. rises; do not change When the Fed sells government securities to a bank, the a. bank‟s reserves increase. .If the Fed sells U.S. government securities to banks, the federal funds rate _____ and banks' reserves _____. d. securities are an asset for the bank. The primary tools that the Fed … . ... By lowering the discount rate, the Federal Reserve . c. both an asset and a liability for the bank. d. Matched Sale-Purchase Agreement - MSPA: An arrangement whereby the Federal Reserve sells government securities (U.S. Treasuries) to an institutional dealer or the central bank … b. a liability for the bank. When the central bank sells government bonds, it is essentially taking money from the public and placing it out of circulation. A) buy bonds B) sell bonds Eliminate C) increase interest rates D) increase reserve ratios As a consequence the amount of bank reserves decreases, which contracts bank lending and causes a decrease in the money supply. Select one: a. rises; falls When fed sells securities, this reduces money supply in the economy, increasing interest rates and reducing demand for loans. When The Fed Sells Government Securities To The Banks, How Does It Usually Receive Payment For The Securities? b. bank‟s reserves decrease. When the Fed sells government securities in the open market, there is less currency in the hands of the banking community, as some money must be used buy these bonds. By Accepting Checks On Bank Accounts B. The Federal Reserve System is a network of 12 regional Federal Reserve banks located in different states across the country. . The Federal Reserve buys and sells government securities on the open market and this is called open market operations. 1.If the Fed sells government securities, in the short run the nominal interest rate _____ and the real interest rate _____. b. the Fed's assets and liabilities increase by the amount of the sale. Through open market operations, the Federal Reserve buys and sells government securities to influence the supply of bank reserves. When the Fed sells government securities to a bank, a. the Fed's assets and liabilities decrease by the amount of the sale. The Federal Reserve buys and sells Government securities. By Drawing Money Out Of Circulation C. By Decreasing Member Bank Profits Not Distributed By The Fed D. By Decreasing Reserves In Bank Accounts At The Fed ____ 16. The Federal Reserve. c. bank‟s reserves do not change. When the Fed sells government securities to a bank, the securities will be a. an asset for the bank. 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