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If the federal reserve sells 70,000 in treasury bonds to a bank at 9% interest, what is the immediate effect on the money supply?

If the federal reserve sells 70,000 in treasury bonds to a bank at 9% interest, what is the immediate effect on the money supply?
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If the federal reserve sells 70,000 in treasury bonds to a bank at 9% interest, what is the immediate effect on the money supply?

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User Droidpl
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2 Answers

1 vote
D , - if the Fed sells bonds, it decreases the money supply by removing cash from the economy in exchange for bonds.

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User Komang
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3 votes

Answer:

It is decreased by $70,000.

Explanation:

took the test

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User Tilpner
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