Respuesta :
Answer:
Repos result in a temporary increase in a bank's reserves and maintain liquidity in the banking system. Banks can sell reverse repos back to the Federal Reserve at a higher price in a short period of time.
Explanation:
i just took the test
Banks can sell repos to other financial institutions for increased liquidity and can sell reverse repos to other financial institutions for increased liquidity.
What is federal reserve?
Federal reserve are government money that is available for commercial banks who are interested in getting loans.
The money is allowed to move within the economy.
When there is money in the bank they can easily give out loans to private owners and institution.
Therefore, Banks can sell repos to other financial institutions for increased liquidity and can sell reverse repos to other financial institutions for increased liquidity.
Learn more on federal reserve here,
https://brainly.com/question/382312
#SPJ2