Help please
The initial impact of the Fed's open market sale of government securities by the Federal Reserve is
A.
a fall in the money supply by some multiple of the dollar volume of the sale.
B.
a reduction of the commercial banking system's reserve deposits at the Fed.
C.
an increase in the money supply by some multiple of the dollar volume of the sale.
D.
an increase in commercial bank deposits at the Fed.

Question

21-07-2022
Business

contestada

Help please
The initial impact of the Fed's open market sale of government securities by the Federal Reserve is
A.
a fall in the money supply by some multiple of the dollar volume of the sale.
B.
a reduction of the commercial banking system's reserve deposits at the Fed.
C.
an increase in the money supply by some multiple of the dollar volume of the sale.
D.
an increase in commercial bank deposits at the Fed.

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Parrain Parrain · Answer 1 · 2022-07-22T21:55:39+02:00

When there is a Fed open market sale, the initial impact is D. an increase in commercial bank deposits at the Fed.

What happens when the Fed sells securities?

When the Fed sells securities, the impact is that people will use dollars to buy the securities and so the volume of money in the economy will decrease.

The way this happens is that the Fed will take money from commercial banks which would increase commercial banking deposits at the Fed.

Find out more on Fed securities sales at https://brainly.com/question/7621338

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