When the Federal Reserve conducts open market operations, itO buys or sells government bonds.increases or decreases the required reserve ratio.O buys and sells foreign currencymanipulates of the rate at which it loans to member banks.How will the Fed's policy action change the money supply? Use only the actions corresponding to your choice in theprevious partThe money supply increasesThe money supply decreasesAnswer BankThe Fed buvs bondsThe Fed sells bondsThe Fed buys foreign currencyThe Fed sells foreign currencyThe Fed increases the reserve ratioThe Fed decreases the reserve ratioThe Fed increases the rate at which it lends to member banksThe Fed decreases the rate at which it lends to member banks

Question
Asked Mar 15, 2019
When the Federal Reserve conducts open market operations, it
O buys or sells government bonds.
increases or decreases the required reserve ratio.
O buys and sells foreign currency
manipulates of the rate at which it loans to member banks.
How will the Fed's policy action change the money supply? Use only the actions corresponding to your choice in the
previous part
The money sup
ply increases
The money sup
ply decreases
Answer Bank
The Fed bu
vs bonds
The Fed sells bonds
The Fed buys foreign currency
The Fed sells foreign currency
The Fed increases the reserve ratio
The Fed decreases the reserve ratio
The Fed increases the rate at which it lends to member banks
The Fed decreases the rate at which it lends to member banks
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When the Federal Reserve conducts open market operations, it O buys or sells government bonds. increases or decreases the required reserve ratio. O buys and sells foreign currency manipulates of the rate at which it loans to member banks. How will the Fed's policy action change the money supply? Use only the actions corresponding to your choice in the previous part The money sup ply increases The money sup ply decreases Answer Bank The Fed bu vs bonds The Fed sells bonds The Fed buys foreign currency The Fed sells foreign currency The Fed increases the reserve ratio The Fed decreases the reserve ratio The Fed increases the rate at which it lends to member banks The Fed decreases the rate at which it lends to member banks

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Expert Answer

Step 1

Open Market operations:

This is the policy of central bank through which buying and selling of government bonds and securities takes place. Generally, Central Bank uses this to monitor the money supply in the economy.

Step 2

Option “A”, when the federal reserve conducts open market operation then it buys or sells government bonds. The s...

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