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When conducting an open-market purchase, the Fed a. buys government bonds, and in so doing increases the money supply. b. buys government bonds, and in so doing decreases the money supply. c. sells government bonds, and in so doing increases the money supply. d. sells government bonds, and in so doing decreases the money supply

Respuesta :

Answer:

d. sells government bonds, and in so doing decreases the money supply

Explanation:

Open market operations -

It is the method to control the supply of money in the market , for buying and selling the government securities done by the Federal reserve , is known as the open market operations .

Inflation is controlled as follows -

  • By selling the government bonds , the money supply is reduces in the market and ,
  • By purchasing the government bonds , the money supply is increased in the market  .

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