A. treasury notes
B. repurchase agreements
C. commercial payable notes
D. commercial receivable notes
✅ The correct answer is option B.
Instrument used by Federal Reserve to smooth money supply and interest rates includes repurchase agreements. A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day.
Instrument used by Federal Reserve to smooth money supply and interest rates includes repurchase agreements. A repurchase agreement (repo) is a form of short-term borrowing for dealers in government securities. In the case of a repo, a dealer sells government securities to investors, usually on an overnight basis, and buys them back the following day.