Question

the open-market committee of the federal reserve announced that it plans to buy government bonds back from individuals and corporations. this action will likely multiple choice increase the supply of money. change fiscal policy. increase the supply of bonds. decrease the supply of money.

Answer 1

When the Federal Reserve buys government bonds back from individuals and corporations, it increases the supply of money.

Step-by-step explanation:

When the open-market committee of the Federal Reserve announces plans to buy government bonds back from individuals and corporations, it is a form of open market operations.

Open market operations involve the purchase or sale of government bonds by the central bank to influence the money supply. In this case, when the Federal Reserve buys bonds, it increases the money supply in circulation, making the answer increase the supply of money.