Answer to Question #230446 in Macroeconomics for Tahsin Jahid

Question #230446

If the Fed wants to increase the money supply with

open-market operations, what does it do?


1
Expert's answer
2021-08-31T15:41:04-0400

Fed can increase the money supply in the economy through purchasing of securities on the open market. This increases the reserves of commercial banks who in turn lend money to people thereby increasing the supply of money in the economy.


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