When the Fed Sells a Bond, It

Multiple Choice

When the Fed sells a bond, it

A) removes money from circulation, equivalent to the value of the bond.
B) deposits the money it receives from the sale in one of its member banks.
C) invests the proceeds in the stock market to aid economic development.
D) increases the amount of money available to make loans and buy goods.
E) uses the profits to decrease the federal debt.