The table above shows the net effect of an open market operation undertaken by the Fed. Use it to answer the following question.

-The Fed has

Question

The table above shows the net effect of an open market operation undertaken by the Fed. Use it to answer the following question.
 
-The Fed has

Quizplus · Accepted Answer

The table shows that the Fed has purchased $25 billion in government securities. When the Fed purchases securities on the open market, it increases the reserves held by banks, which in turn leads to an increase in the supply of money. Therefore, choice E is the correct answer.

The Table Above Shows the Net Effect of an Open