In an open-market sale the Federal Reserve ________ government bonds and the supply of bank reserves ________.

Name: In an open-market sale the Federal Reserve ________ government bonds and the supply of bank reserves ________.
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When the Federal Reserve sells government bonds in the open market, there is less currency in the hands of the banking community as some money must be used buy these bonds. As a consequence the amount of bank reserves decreases.

In an Open-Market Sale the Federal Reserve ________ Government Bonds