When the Federal Reserve sells U.S.government securities on the open market,this tends to ____ banks reserves and ______ the money supply.

Question

Quizplus · Accepted Answer

When the Federal Reserve sells U.S. government securities on the open market, it is essentially taking money out of circulation and placing it in its own accounts. This action reduces the reserves that banks have available to lend, thereby lowering the money supply.

When the Federal Reserve Sells U