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C211 - Competency 4 - Study Guide 2025 Questions and Answers What tools does the Federal Reserve have with regards to monetary control? - -Answer --Federal Open Market Committee, OMOs (Open Market Operations), Sales of Bonds What are open market operations? - --Answer --When the Fed purchases and sales US government bonds to commercial banks and general public When the Fed buys bonds, what impact does this have on the money supply and aggregate demand? - --Answer --After the purchase, these dollars are in the hands of the public. INCREASES the money supply When the Fed sells bonds, what impact does this have on the money supply and aggregate demand? - --Answer --After the sale, the dollars the federal government receives for the bonds are out of the hands of the public. Thus, and open-market sale of bonds by the federal government DECREASE the money supply Money Supply - goes DOWN ....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1