All else equal, if the Federal Reserve sells Treasury securities in the open market, then the money supply curve will shift _____, and the equilibrium interest rate will:

Question

Quizplus · Accepted Answer

When the Federal Reserve sells Treasury securities in the open market, it effectively reduces the amount of money in the banking system, which shifts the money supply curve to the left. This reduction in the money supply increases the equilibrium interest rate.

All Else Equal, If the Federal Reserve Sells Treasury Securities