When the Fed buys bonds from the public,it

Name: When the Fed buys bonds from the public,it
Brand: Quizplus
Rating: 4.8 (55 reviews)

Question

Quizplus · Accepted Answer

When the Fed buys bonds from the public, it increases the flow of reserves into the banking system. This is because the Fed pays for the bonds by creating new money, which is then deposited into the bank accounts of the sellers. This increase in reserves can lead to an increase in lending and ultimately increase the money supply.

When the Fed Buys Bonds from the Public,it