When the Fed sells government securities,banks have __________ money to lend and economic growth
A)less; will slow
B)less; will accelerate
C)more; will slow
D)more; will accelerate

Question

Quizplus · Accepted Answer

When the Federal Reserve sells government securities, it effectively removes money from the banking system because banks purchase these securities with cash. This reduces the amount of money banks have available to lend, which can lead to a slowing of economic growth as borrowing costs increase and less capital is available for investment.

When the Fed Sells Government Securities,banks Have __________ Money to Lend