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If the Federal Reserve sells $40,000 in Treasury bonds to a bank at 5% interest, what is the immediate effect on the money supply? a. It is decreased by $40,000. b. It is increa…

If the Federal Reserve sells $40,000 in Treasury bonds to a bank at 5% interest, what is the immediate effect on the money supply? a. It is decreased by $40,000. b. It is increa…
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If the Federal Reserve sells $40,000 in Treasury bonds to a bank at 5% interest, what is the immediate effect on the money supply?

a. It is decreased by $40,000.
b. It is increased by $42,000.
c. It is decreased by $42,000.
d. It is increased by $40,000.

asked
User Lukas Winzenried
by
8.5k points

2 Answers

1 vote

Answer:

It is decreased by $40,000

Step-by-step explanation:

A p e x :)

answered
User Michael Bromley
by
7.7k points
5 votes
The Answer is A, Decreased by $40,000
answered
User Miesha
by
8.3k points
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