When the Federal Reserve System buys bonds in the open market,the national debt
A)Must increase.
B)Must increase as long as the Fed buys only newly issued bonds.
C)Is not affected.
D)Will decrease because the Fed is a government agency.

Question

Quizplus · Accepted Answer

When the Federal Reserve System buys bonds in the open market, it increases the amount of money in circulation, but it does not directly affect the national debt. The national debt is the total amount of money owed by the federal government, and it is primarily influenced by government spending and taxation policies.

When the Federal Reserve System Buys Bonds in the Open