If the Fed buys government bonds through open-market operations, it will
A) increase the demand for bonds in the bond market.
B) decrease the demand for bonds in the bond market.
C) increase the supply of bonds in the bond market.
D) decrease the supply of bonds in the bond market.

Question

Quizplus · Accepted Answer

When the Fed buys government bonds, it increases the demand for bonds in the bond market, as it is purchasing these bonds from the public.

If the Fed Buys Government Bonds Through Open-Market Operations, It