Title The Fed sells $1 million in bonds to a bond dealer. The bond dealer's bank experiences Question 2... Description The Fed sells $1 million in bonds to a bond dealer. The bond dealer's bank experiences Question 2 options: A) a decrease in assets of $1 million as its reserves decrease and a decrease in liabilities of $1 million as its deposits fall. B) an increase in assets of $1 million as its deposits fell by $1 million, and a decrease in liabilities as its reserves fell by $1 million. C) no change in assets or liabilities. D) a decrease in assets of $1 million as its reserves decrease and an increase in liabilities of $1 million as its deposits rise.

EBK CFIN
6th Edition
ISBN:9781337671743
Author:BESLEY
Publisher:BESLEY
Chapter3: The Financial Environment: Markets, Institutions And Investment Banking
Section: Chapter Questions
Problem 19PROB
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Title The Fed sells $1 million in bonds to a bond dealer. The bond dealer's bank experiences Question 2... Description The Fed sells $1 million in bonds to a bond dealer. The bond dealer's bank experiences Question 2 options: A) a decrease in assets of $1 million as its reserves decrease and a decrease in liabilities of $1 million as its deposits fall. B) an increase in assets of $1 million as its deposits fell by $1 million, and a decrease in liabilities as its reserves fell by $1 million. C) no change in assets or liabilities. D) a decrease in assets of $1 million as its reserves decrease and an increase in liabilities of $1 million as its deposits rise.  
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