An open market sale of U.S. Treasury securities by the Fed will cause the Fed's balance sheet to show:
A. A decrease in the asset of securities and a decrease in the liability of reserves.
B. An increase in the liability of reserves.
C. No change in the size of the balance sheet, just the composition of assets will change from securities to cash.
D. An increase in the asset category of securities and the liability category of reserves.
Answer:A
An open market sale of U.S. Treasury securities by the Fed will cause the Fed's balance sheet to show:
A. A decrease in the asset of securities and a decrease in the liability of reserves. B. An increase in the liability of reserves. C. No change in the size of the balance sheet, just the composition of assets will change from securities to cash. D. An increase in the asset category of securities and the liability category of reserves.