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Which of the following would reduce the money supply? Multiple Choice An open market sale of...

Question:

Which of the following would reduce the money supply? Multiple Choice An open market sale of government bonds by the Fed. Com
Which of the following would reduce the money supply? Multiple Choice An open market sale of government bonds by the Fed. Commercial banks use excess reserves to buy government bonds from the public. Taasisi An open market purchase of government bonds by the Fed. A check clears from Bank A to Bank B.

Answers

The right answer is, an open market sale of government bonds by the Fed. When the Fed sales the government wants it means those who are interested in buying the government bonds has to pay the money to the Fed which will reduce the money supply.

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