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Securities from the non-bank public

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Question

If the Federal Reserve buys $40,000 worth of securities from the non-bank public, and the non-bank public then deposits the payment in their bank account, what happens next?

  • R increases by $40,000 and the MB rises by $40,000
  • C and R both increase by $40,000, and MB increases by $80,000
  • C increases by $40,000 and the MB increases by $40,000
  • C decreases by $40,000 and the MB increases by $40,000

Reference no: EM132342488

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