Question

If the Federal Reserve buys $40,000 in Treasury bonds from a bank at 6%

interest, what is the immediate effect on the money supply?
A. It is decreased by $40,000
B. It is increased by $40,000
C. It is decreased by $2400
D.it is increased by $2400

Answer 1

The answer would be B it is increased by 40,000

Answer 2

The answer would be it would increase by 40,000