In the 1970s, in response to recessions caused by an increase in the price of oil, the central banks in many countries increased their money supplies. The central banks might have done this by
A)selling bonds on the open market, which would have raised the value of money.
B)purchasing bonds on the open market, which would have raised the value of money.
C)Selling bonds on the open market, which would have raised the value of money.
D)purchasing bonds on the open market, which would have lowered the value of money.

Question

Quizplus · Accepted Answer

Purchasing bonds on the open market injects more money into the economy, which can lower the value of money by increasing the money supply. This is a common monetary policy tool used to combat recessions.

In the 1970s, in Response to Recessions Caused by an Increase