When examining the Fed's balance sheet, in most periods, the two most important assets are: A. U. S. Treasury securities and Gold. B. Gold and Mortgage minus backed securities. C. Mortgage minus backed securities and Discount loans to banks. D. U. S. Treasury securities and Discount loans to banks.

Answer: D. U. S. Treasury securities and Discount loans to banks.

Explanation: When examining the Fed's balance sheet, in most periods, the two most important assets are U. S. Treasury securities and Discount loans to banks. The Fed's balance sheet balance sheet includes a large number of distinct assets and liabilities containing a great deal of information about the scale and scope of its operations. Of these assets the U. S. Treasury securities and Discount loans to banks are paramount.

U. S Treasury securities are such as bills, notes and bonds issued by the U. S. government viewed as having virtually no credit risk. As such, they are debt obligations of the U. S. government.

Discount loans to banks are direct short term loans provided to banks by the Fed to meet temporary shortages of liquidity caused by internal or external disruptions.