Macroeconomics

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Moderate

Open Market Operation

MACRO-OMLJBL

To convince a commercial bank, to buy a large quantity of Treasury bills, the Fed agrees to sell them at a discount price from what the bills would sell for in the current market.

Which of the following is true?

A

The commercial bank's liabilities increase.

B

The commercial bank's deposits increase.

C

The commercial bank's assets increase.

D

The commercial bank's reserves increase.

E

The interest rate on Treasury bills rises.