ECO 372 Week 3 DQ 2

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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?
If the Federal Reserve is a net seller of government bonds it means money is being added to the supply. This will decrease the interest rate and the economy flourishes.
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