Figure 30-3 On the following graph, MS represents the money supply and MD represents money demand. -Refer to Figure 30-3. Which of the following events could explain a shift of the money-supply curve from MS₂ to MS₁? A)A decrease in the value of money B)An increase in the price level C)An open-market sale of bonds by the Federal Reserve D)The Federal Reserve buys bonds

Question

Quizplus · Accepted Answer

An open-market sale of bonds by the Federal Reserve reduces the amount of money in the banking system, which can lead to a leftward shift in the money supply curve, as depicted from MSS1 to MSS1.

Figure 30-3 on the Following Graph, MS Represents the Money Supply and Supply