To minimize the impact of its transactions on the monetary base, the Treasury
A)times its payments from its account at the Fed to match its withdrawals from local banks.
B)makes purchases only on a few days per year.
C)times most of its purchases for mid-April, when it receives most of its tax receipts.
D)attempts to make roughly the same dollar value of purchases each business day.

Question

Quizplus · Accepted Answer

By timing its payments from its account at the Fed to match its withdrawals from local banks, the Treasury can minimize the impact of its transactions on the monetary base. This helps to keep the money supply stable and avoid any disruptions to the economy. Making purchases only on a few days per year or timing purchases for mid-April may not be practical or feasible for the Treasury, while attempting to make roughly the same dollar value of purchases each business day could lead to fluctuations in the monetary base.

To Minimize the Impact of Its Transactions on the Monetary