Answer:
increases in taxes.
Explanation:
The Federal Reserve buys and sells government securities to control the money supply and interest rates. This activity is called open market operations. To increase the money supply, the Fed will purchase bonds from banks, which injects money into the banking system. It will buy bonds to reduce the money supply, increasing the taxes of the people.
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The injection of money into the economy makes the consumers have more disposable income that will lead to an increase in taxes for the taxpayers.
When the government injects money into the economy in the form of buying and selling government securities for controlling the money supply in the market and the interest rates charges over the money supply. This phenomenon in the market is known as open market operations.
For increasing the money supply in the market the Federal Reserve will purchase bonds from the banks, this will lead to more money supply in the banking system.
For making the higher money supply by the banking system, the banks will buy bonds from the market for reducing the money supply.
The relation between the money supply by the government and the bank will affect the consumers and it will lead to an increase in the taxes of the people.
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