If the Fed sells government bonds to the public, then reserves? a) increase and the...
If the Fed sells government bonds to the public, then reserves?
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Homework Answers
Ans: d ) decrease and the money supply decreases.
Explanation:
If the Fed sells government bonds to the public then the money supply will be reduced in the economy. As a result reserves decrease . This is known as contractionary monetary policy.
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If the Fed sells government bonds to the public, then reserves?
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