On the Fedʹs balance sheet, assets include
A) Federal Reserve notes and loans to depository institutions.
B) depository institutions deposits at the Federal Reserve and loans to depository institutions.
C) Federal Reserve notes and depository institutionsʹ deposits at the Federal Reserve.
D) U.S. government securities and loans to depository institutions.

Question

Quizplus · Accepted Answer

The Fed's assets include U.S. government securities and loans to depository institutions. This is because the Fed uses these assets to conduct monetary policy and regulate the money supply. Federal Reserve notes and depository institutions' deposits at the Federal Reserve are liabilities on the Fed's balance sheet.

On the Fedʹs Balance Sheet, Assets Include