Question

If Treasury deposits at the Fed are predicted to ________, the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves.

Answer 1

Options:

A) defensive; inject

B) defensive; drain

C) dynamic; inject

D) dynamic; drain

Answer:

Correct option is A.

Step-by-step explanation:

If Treasury deposits at the Fed are predicted to increase, the manager of the trading desk at the New York Fed bank will likely conduct defensive open market operations to inject reserves.