If the Treasury issues new bonds that are purchased by the general public, the money supply is reduced if the Treasury deposits the funds in the Federal Reserve.

Question

​If the Treasury issues new bonds that are purchased by the general public, the money supply is reduced if the Treasury deposits the funds in the Federal Reserve.

Quizplus · Accepted Answer

When the Treasury issues new bonds that are purchased by the general public and the funds are deposited in the Federal Reserve, the money that the public used to buy the bonds is removed from circulation, thereby reducing the money supply.

​If the Treasury Issues New Bonds That Are Purchased by the General

If the Treasury Issues New Bonds That Are Purchased by the General