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13 April, 06:08

How do open-market operations

affect the money supply?

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  1. 13 April, 06:23
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    Answer: The Federal Reserve buys and sells government securities to control the money supply and interest rates. This activity is called open market operations ... To increase the money supply, the Fed will purchase bonds from banks, which injects money into the banking system. It will buy bonds to reduce the money supply.
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