An open-market sale
A)increases the number of dollars and the number of bonds in the hands of the public.
B)increases the number of dollars in the hands of the public and decreases the number of bonds in the hands of the public.
C)decreases the number of dollars and the number of bonds in the hands of the public.
D)decreases the number of dollars in the hands of the public and increases the number of bonds in the hands of the public.

Question

Quizplus · Accepted Answer

An open-market sale by the central bank involves selling government bonds to the public, which decreases the money supply (dollars) in the public's hands and increases the number of bonds held by the public.

An Open-Market Sale