The Federal Reserve decreases the money supply by _____________?
Correct answer: C. selling treasury bills
- A. selling Swiss bills
- B. buying Swiss bills
- C. selling treasury bills
- D. buying treasury billsCurrencies & Foreign Exchange
Explanation
When the Federal Reserve sells treasury bills, buyers pay for them and funds move out of the banking system, reducing reserves and the money supply. Buying treasury bills has the opposite expansionary effect.
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