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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

Explain how an open market sale decreases the money supply.

To determine

The change in money supply.

Explanation

When there is an open market sale of a security, it will result in the leakage of money from the economy. Suppose the Fed sells government securities to a commercial bank, it leads to a reduction ...

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