If Bank A sells a $100,000 U.S. Treasury bond to the Fed, Bank A's excess reserves will:
A. Increase by less than $100,000.
B. Not change.
C. Decrease by less than $100,000.
D. Increase by $100,000.
Answer:D
If Bank A sells a $100,000 U.S. Treasury bond to the Fed, Bank A's excess reserves will:
A. Increase by less than $100,000. B. Not change. C. Decrease by less than $100,000. D. Increase by $100,000.