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in an open-market purchase the federal reserve government bonds and the supply of bank reserves . multiple choice buys; increases buys; decreases sells; decreases sells; increases


The government bonds and bank reserve amounts are purchased by the Federal Reserve through open market operations. In the case of open market bond purchases, the price of bonds is elevated and interest rates consequently decrease. This expansion of the money supply reduces the value of money and results in a decline in the money market interest rate. The Federal Reserve makes open market treasury bond purchases in order to initiate an increase in the money supply. Alternatively, the circulation of money will decrease in the event of open market bond sales. For further information on the Federal Reserve, visit brainly.com/question/23247429 #SPJ4.