Question

f the Fed sells government bonds to the public, then reserves a. increase and the money supply increases. b. increase and the money supply decreases. c. decrease and the money supply increases. d. decrease and the money supply decreases.

Answer 1

d. decrease and the money supply decreases.

Step-by-step explanation:

If the Fed sells government bonds to the public then the money supply will be reduced in the economy and as a result the reserves will decrease.