When the Fed sells bonds,the quantity of reserves in the banking system declines and the money supply decreases.

Name: When the Fed sells bonds,the quantity of reserves in the banking system declines and the money supply decreases.
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When the Fed sells bonds, it is essentially collecting money from the banking system, which reduces the amount of reserves in the system. As a result, the banks have less money to lend out to borrowers, which can ultimately decrease the overall money supply in the economy.

When the Fed Sells Bonds,the Quantity of Reserves in the Banking