When the Fed wants to change the money supply,it usually buys or sells money market mutual funds.

Question

Quizplus · Accepted Answer

When the Fed wants to change the money supply, it typically buys or sells government securities in the open market through Open Market Operations (OMO). This affects the reserves of banks, which in turn influences the money supply. While money market mutual funds can be a part of the securities that the Fed buys or sells, they are not the primary instrument used to adjust the money supply.

When the Fed Wants to Change the Money Supply,it Usually