When the Fed sells bonds,it is:
A) quantitative easing.
B) expansionary monetary policy.
C) tight money policy.
D) easy money policy.

Question

Quizplus · Accepted Answer

Selling bonds is a way for the Fed to reduce the money supply in the market, as buyers of the bonds will have to pay for them with their own money. This reduction in money supply can be seen as a way to tighten monetary policy, hence option C is the correct choice.

When the Fed Sells Bonds,it Is