When the Fed sells government securities

A. reserves decrease, leading to a increase in the money supply by an amount more than the sale of the government securities.
B. reserves increase, leading to a increase in the money supply by an amount more than the sale of the government securities.
C. reserves decrease, leading to a decrease in the money supply by an amount more than the sale of the government securities.
D. reserves increase, leading to a decrease in the money supply by an amount more than the sale of the government securities.


Answer: C

Economics

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