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If the government wanted the economy to expand, would the Federal Reserve (the Fed) buy or sell bonds?

1 Answer

4 votes

Answer:

Buy

Step-by-step explanation:

If the government buys bonds in an open market purchase, the supply of money would increase.

The increase in the supply of money would increase the funds available for production activities. As a result production would increase and all things being equal GDP would increase

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User Ralphilius
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