Which the fed loans cash to business banks

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Assignment:

In the United States, starting at 2006, the Federal Reserve sets a financing cost focus for the government reserves (short-term bank saves) market. [citation needed] When the genuine administrative assets rate is higher than the objective, the Federal Reserve Bank of New York will for the most part expand the cash supply through a repurchase arrangement (or repo), in which the Fed loans cash to business banks. Whenever the real government subsidizes rate is not exactly the objective, the Fed will for the most part diminish the cash supply by means of an opposite repo, in which the banks buy protections from the Fed.

Reference no: EM133210705

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