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tools the Fed uses to affect money supply

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Name the three tools of the Fed to affect the money supply, and explain how the Fed would use each tool to increase the money supply.

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The solution identifies tools the Fed uses to affect money supply in this post.

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The three tools the Fed uses to affect money supply are:

1. Open Market Operations. The Fed may purchase or sell Treasury securities in the market, thus affecting the supply of money in the economy. If the Fed wished to increase the money supply with this tool, then it should purchase (rather ...

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