QUESTION 21 If there is a recession in the economy then Fed may act by O a. buying bonds. This buying would increase the money supply. b. buying bonds. This buying would reduce the money supply. C. selling bonds. This selling would increase the money supply. d. selling bonds. This selling would reduce the money supply.

Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Monetary System
Section: Chapter Questions
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QUESTION 21
If there is a recession in the economy then Fed may act by
O a. buying bonds. This buying would increase the money supply.
b. buying bonds. This buying would reduce the money supply.
C. selling bonds. This selling would increase the money supply.
O d. selling bonds. This selling would reduce the money supply.
Transcribed Image Text:QUESTION 21 If there is a recession in the economy then Fed may act by O a. buying bonds. This buying would increase the money supply. b. buying bonds. This buying would reduce the money supply. C. selling bonds. This selling would increase the money supply. O d. selling bonds. This selling would reduce the money supply.
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