When the Federal Reserve fights recession via open market operations, the supply of reserves curve shifts ________ and the supply of money curve shifts ________.

Question

Quizplus · Accepted Answer

When the Federal Reserve fights recession via open market operations, it buys securities, which increases the reserves in the banking system, shifting the supply of reserves curve rightward. This action also increases the money supply, shifting the supply of money curve rightward.

When the Federal Reserve Fights Recession Via Open Market Operations