Suppose the Fed sells a $50,000 U.S. Treasury security to Martha, a member of the public. If Martha writes a check to the Fed in order to buy this security, the money in her checking account will be transferred to
a. the Fed, and now the Fed will have $50,000 more in reserves than it had before.
b. her bank, and now her bank will have $50,000 more in reserves than it had before.
c. the Fed, and now it is as if the money doesn't exist.
d. the Treasury, and now the Treasury will have $50,000 more in reserves than it had before.
11th EditionClaudia Bienias Gilbertson, Debra Gentene, Mark W Lehman
7th EditionN. Gregory Mankiw
1st EditionAlexander Holmes, Barbara Illowsky, Susan Dean
13th EditionDavid R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams