Question

HELP PLZ WILL MARK AS BRAINLIEST!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! In two or three sentences, describe how open-market operations change the money supply.

Answer 1

The government securities that are used in open market operations are Treasury bills, bonds and notes.... Therefore, if the FOMC wants to decrease the money supply, it will sell securities. To increase the money supply in the market, the FOMC will purchase securities from banks.

Answer 2

The Fed uses open market operations to buy or sell securities to banks. When the Fed buys securities, they give banks more money to hold as reserves on their balance sheet. When the Fed sells securities, they take money from banks and reduce the money supply.

Does open market sales increase the money supply?

Open market operations are the buying and selling of government bonds by the Federal Reserve. When the Federal Reserve buys a government bond from a bank, that bank acquires money that it can lend out. The money supply will increase. An open market purchase puts money into the economy.

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