Open-market purchases by the Fed make the money supply
A)increase,which makes the value of money increase.
B)increase,which makes the value of money decrease.
C)decrease,which makes the value of money decrease.
D)decrease,which makes the value of money increase.

Question

Quizplus · Accepted Answer

Open-market purchases by the Fed increase the money supply, which means there is more money in circulation. When there is more money in circulation, the value of money decreases because there is more of it available relative to the amount of goods and services in the economy.

Open-Market Purchases by the Fed Make the Money Supply