If the Federal Reserve wished to increase interest rates using open market operations it would

Question

Quizplus · Accepted Answer

Selling US government securities would decrease the money supply in the economy as sellers of these securities would receive payment in the form of reserves held at the Federal Reserve. This decrease in the money supply would increase interest rates. Buying securities or gold would increase the money supply and therefore decrease interest rates. Buying corporate stocks is not a typical action taken by the Federal Reserve and would not have a significant impact on interest rates.

If the Federal Reserve Wished to Increase Interest Rates Using