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If a bank or brokerage house gave the Federal Reserve Bank $25 million in U.S. government bonds as collateral, then the Feder

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Answer #1

The given statement is false.

Explanation : Granting short term loans by the Federal Reserve to increase money supply in the economy is known as repo.

Reverse repo takes place when Federal reserve borrows money from the commercial banks or other financial institution to decrease the money supply in the economy.

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