Question

In "open market operations" to __________ M1, the securities held by a commercial bank (or the public) are exchanged for "cash" from the Fed (the transfer of funds from the Fed to a bank)..A. reduceB. restrainC. expandD. none of the above

Answer 1

Answer:

expand

Explanation:

In "open market operations" to expand M1, the securities held by a commercial bank (or the public) are exchanged for "cash" from the Fed (the transfer of funds from the Fed to a bank.

The Fed buys securities from banks holding it, for money; so as to increase the supply of money in the economy.