When the Fed buys bonds in open-market operations, it increases the money supply. If the Fed wants to decrease the money supply, it can the reserve requirement. If the Fed wants to increase the money supply, it can the interest rate it pays on reserves.

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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When the Fed buys bonds in open-market operations, it increases
the money supply.
If the Fed wants to decrease the money supply, it can
the reserve requirement.
If the Fed wants to increase the money supply, it can
the interest rate it pays on reserves.
When the FOMC increases its target for the federal funds rate, the money supply will
When Citibank repays a loan it had previously taken from the Fed, it
the money supply.
Transcribed Image Text:When the Fed buys bonds in open-market operations, it increases the money supply. If the Fed wants to decrease the money supply, it can the reserve requirement. If the Fed wants to increase the money supply, it can the interest rate it pays on reserves. When the FOMC increases its target for the federal funds rate, the money supply will When Citibank repays a loan it had previously taken from the Fed, it the money supply.
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