ECO 372 Week 3 DQ 2 - Version 5

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•What happens to the money supply, interest rates, and the economy if the Federal Reserve is a net seller of government bonds? What happens to the money supply, interest rates, and the economy if the Federal Reserve is a net buyer of government bonds. Why would the government implement a stimulus program into the economy?

Response
What happens to the money supply, interest rates, and the economy if the Federal Reserve is a net seller of government bonds? What happens to the money supply, interest rates, and the economy if the Federal Reserve is a net buyer of government bonds?
One of the main functions of the Federal Reserve System is to control the money supply and they do this by selling and buying U.S. government bonds.
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