Author Question: If the Fed makes a discount loan of 2 million to a commercial bank, the Fed's balance sheet will ... (Read 31 times)

neverstopbelieb · **on:** Jun 30, 2018

If the Fed makes a discount loan of 2 million to a commercial bank, the Fed's balance sheet will show

A) an increase in discount loans of 2 million and an increase in bank reserves of 2 million.
B) an increase in discount loans of 2 million and a decrease in bank reserves of 2 million.
C) a decrease in discount loans of 2 million and an increase in bank reserves of 2 million.
D) a decrease in discount loans of 2 million and a decrease in bank reserves of 2 million.

Question 2

The price at which an option may be exercised is called the

A) market price.
B) equilibrium price.
C) strike price.
D) fixed price.