Effect on US money supply of selling $100 billion treasury bonds
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Create a document explaining what would happen to the US money supply if the Fed sold $100 billion in Treasury bonds.
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If the Fed sold $100 billion in Treasury Bonds, then money supply would be reduced. The money that agents will use to pay for these bonds goes "out of circulation" as it is paid to the Fed.
By way of the money multiplier, we can find approximately how much would the money supply fall if the Fed sold $100 billion in bonds. Recall that a sale of X dollars in bonds will cause a fall of MORE ...
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