Question

when the federal open market committee (fomc) directs that treasury securities be sold in the open market, this a) decreases the money supply. b) is intended to hinder contraction of the money supply. c) stabilizes the money supply. d) increases the supply of money.

Answer 1

When the Federal Open Market Committee allows treasury securities to be sold in the open market, the result is a) decreases the money supply.

What happens when treasury securities are sold?

When treasury securities are sold by the FOMC of the Federal Reserve, people will buy those securities which means that the Federal Reserve gets that money.

As a result, the money supply in the economy will decrease as the amount of money in the economy will be reduced by the amount that went to the Fed.

In conclusion, when treasury securities are sold on the open market, this decreases the money supply.

Find out more on open market operations at brainly.com/question/14256204

#SPJ1