In an open-market purchase the Federal Reserve ______ government bonds and the supply of bank reserves ______.

Name: In an open-market purchase the Federal Reserve ______ government bonds and the supply of bank reserves ______.
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In an open-market purchase, the Federal Reserve buys government bonds from the market. This increases the supply of bank reserves because the sellers of the bonds receive payments that are deposited in banks, leading to an increase in the banks' reserves.

In an Open-Market Purchase the Federal Reserve ______ Government Bonds