Ask Question
27 January, 20:21

Which of the following actions would cause an increase in the level of reserves in the banking system? (A) A customer withdraws funds from Reliable Bank and deposits them in National Bank. (B) The FOMC instructs the NY trading desk to sell government bonds on the open market. (C) The FOMC instructs the NY trading desk to purchase government bonds on the open market. (D) The federal government issues new bonds to finance the budget deficit. The federal government issues new bonds to finance the budget deficit. (E) The federal government pays off bonds that were originally issued to finance the budget deficit.

+2
Answers (1)
  1. 27 January, 21:10
    0
    Answer:C

    Explanation:

    If the Federal Government buys bonds, it means it is increasing money supply on the market. Prices and interest rates therefore increase including the reserve ratio
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Which of the following actions would cause an increase in the level of reserves in the banking system? (A) A customer withdraws funds from ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers