When the Federal Reserve seeks to expand the money supply, it
A)sells securities
B)buys securities
C)runs a deficit
D)runs a surplus

Name: When the Federal Reserve seeks to expand the money supply, it A)sells securities B)buys securities C)runs a deficit D)runs a surplus
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Question

Quizplus · Accepted Answer

When the Federal Reserve wants to expand the money supply, it buys securities in the open market. This action increases the reserves of the banking system, allowing banks to create more money through loans.

When the Federal Reserve Seeks to Expand the Money Supply