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    Macroeconomics Study Set 39
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    Exam 4: The Monetary System: What It Is and How It Works
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    To Reduce the Money Supply, the Federal Reserve
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To Reduce the Money Supply, the Federal Reserve

Question 88

Question 88

Multiple Choice

To reduce the money supply, the Federal Reserve:


A) buys government bonds.
B) sells government bonds.
C) creates demand deposits.
D) destroys demand deposits.

Correct Answer:

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