Question

An open-market purchase Group of answer choices increases the number of dollars and the number of bonds in the hands of the public. increases the number of dollars in the hands of the public and decreases the number of bonds in the hands of the public. decreases the number of dollars and the number of bonds in the hands of the public. decreases the number of dollars in the hands of the public and increases the number of bonds in the hands of the public.

Answer 1

Answer:

increases the number of dollars in the hands of the public and decreases the number of bonds in the hands of the public.

Explanation:

Open market operations is one of the tools used by regulatory agencies to control supply of cash in the economy. This is done to control economic indices like inflation and deflation.

During open market operations the regulatory body can sell securities to reduce cash in the economy or buy securities to increase cash supply.

In this instance an open market purchase involves buying of securities from the public. The public will have more cash on hand and less of the securities (bonds).