Suppose the Fed purchases government bonds through open-market operations. All other things

Suppose the Fed purchases government bonds through open-market operations. All other things

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 Suppose the Fed purchases government bonds through open-market operations. All other things remaining equal, this is likely to:

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decrease the price level and increase the real wealth of consumers. 

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decrease the price level and make domestic goods less expensive relative to foreign goods. 

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increase the price level and eventually decrease the interest rate and investment spending.

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increase the price level and eventually decrease the demand for money as well as goods and services.

 

 
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