The Federal Reserve sells large amounts of treasury securities in order to:
A. enforce regulations on its member banks.
B. pressure banks to lower their discount rates.
C. encourage banks to lend more money.
D. reduce the available money supply.

The availability of money in the market is known as the money supply in an economy. The supply of money is controlled by the supplier, typically the central bank of a country.

When Federal Reserve sells its treasury securities, the rate of the flow of money supply in an economy is lowered.

Hence, option D holds true regarding money supply.

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The Federal Reserve sells large amounts of treasury securities in order to: A. enforce regulations on its member banks. B. pressure banks to lower their discount rates. C. encourage banks to lend more money. D. reduce the available money supply.

Respuesta :

What is money supply?

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The Federal Reserve sells large amounts of treasury securities in order to:
A. enforce regulations on its member banks.
B. pressure banks to lower their discount rates.
C. encourage banks to lend more money.
D. reduce the available money supply.