Decreases in which of the following items from the Fed's balance sheet will result in increases in the monetary base?
A)Securities
B)Gold and SDR certificates
C)U.S. Treasury currency outstanding
D)U.S. Treasury deposits

Question

Quizplus · Accepted Answer

A decrease in U.S. Treasury deposits at the Fed increases the monetary base because these deposits are part of the Fed's liabilities. When they decrease, it effectively increases the reserves available to the banking system, thus increasing the monetary base.

Decreases in Which of the Following Items from the Fed's