When the Federal Reserve buys government bonds, the effect on the econ…

Question

When the Federal Reserve buys government bonds, the effect on the economy is that it:

Accepted Answer

C. Puts money in

1. It pays sellers for the bonds it buys.
2. That payment enters circulation.
3. So it puts money into the economy.
_Source: OpenStax Introduction to Business 2e, Chapter 15, Understanding Money and Financial Institutions._

Answer

Freezes money

Answer

Burns money up

Answer

Takes money out

When the Federal Reserve buys government bonds, the effect on the economy is that it:

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