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

-The Fed can decrease the money supply by

Question

The table below shows the net effect of an open market operation undertaken by the Fed. Use it to answer the following question.
 
-The Fed can decrease the money supply by

Quizplus · Accepted Answer

The table shows that when the Fed sells government securities in an open market operation, the money supply decreases, which is the desired effect when the Fed wants to reduce inflationary pressure in the economy. Therefore, selling government securities is the best choice to decrease the money supply.

The Table Below Shows the Net Effect of an Open