If the Fed wants to increase the money supply through open market operations,it will
A) purchase government securities.
B) sell government securities.
C) first purchase,then sell,government securities.
D) lend more reserves to commercial banks.

Question

Quizplus · Accepted Answer

When the Fed wants to increase the money supply, it will purchase government securities from commercial banks. This adds new money to the system by increasing the reserves that commercial banks hold, which they can then lend out to customers, ultimately increasing the money supply.

If the Fed Wants to Increase the Money Supply Through