Homework SourseIf the federal reserve decided to lower interest rates it co
If the federal reserve decided to lower interest rates, it could
But bonds to raise the money supply
But bonds to lower the money supply
Sell bonds to raise the money supply
Sell bonds to lower the money supply
If the federal reserve decided to lower interest rates, it could
But bonds to raise the money supply
But bonds to lower the money supply
Sell bonds to raise the money supply
Sell bonds to lower the money supply
But bonds to raise the money supply
But bonds to lower the money supply
Sell bonds to raise the money supply
Sell bonds to lower the money supply
Solution
Answer is Buy the bonds to raise the money supply.
Explanation:
With the increase in money supply, the price of money i.e. interest goes down. And this happens when the federal reserve buy the bonds from the market and release the cash.
