Question

Suppose the Federal Reserve Banks sell $2 billion of government bonds to the public which pays for them
by drawing checks. As a result, commercial bank reserves will:

Answer 1

Suppose the Federal Reserve Banks sell $2 billion of government bonds to the public which pays for them by drawing checks. As a result, commercial bank reserves will decrease by $2 billion.

The working parts of the Federal Reserve System are its 12 Federal Reserve Banks and its 24 Branches. Each Reserve Bank conducts business in its own distinct district, or geographic region, within the United States.

With offices in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco, the Reserve Banks are decentralized by design. The Fed's decisions and reserves are dispersed evenly across the country thanks to this structure, which also assures that the Fed takes into account the monetary policy-setting needs of communities from across the country.

Federal Reserve Districts are the divisions of the United States into which each Reserve Bank operates. The 24 Branches of the Banks service banks are the operating arms of the Federal Reserve System.

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