The process of bundling loans together and buying and selling these bundles in a secondary financial market is called
A) open market operations.
C) fractional reserve lending.
To offset the effect of households and firms deciding to hold more of their money in checking account deposits and less in currency, the Federal Reserve could
A) raise bank taxes.
B) sell Treasury securities.
C) raise government spending.
D) lower the required reserve ratio.
One way investment banks differ from commercial banks is that investment banks
A) lend exclusively to households.
B) do not take in deposits.
C) only buy and sell mortgages.
D) trade only in foreign exchange markets.
Money market mutual funds sell shares to investors and use the money to buy
A) mortgage-backed securities.
B) foreign currency.
C) short-term securities.
D) overseas assets through foreign direct investment.