Fed purchases of bonds from the public, called open market operations:
A. tend to increase reserves in the system leading to reductions in interest rates.
B. tend to reduce the money supply because the bonds are expensive to purchase.
C. tend to reduce reserves in the banking system because all the Fed gets is more bonds.
D. tend to increase bond prices but generally have no effect on bank reserves.
A. tend to increase reserves in the system leading to reductions in interest rates.
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