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Q: Why the fed buys 5 billion worth of treasury bonds on the open market?
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The fed buys 5 billion worth of treasury bonds on the open market what effect does this have on the money supply?

The Fed sells $5 billion worth of Treasury bonds on the open market.


The Fed sells 5 billion worth of Treasury bonds on the open market?

It would stay the same gurrrl


What would happen if the Fed sells 5 billion worth of Treasury bonds on the open market.?

The money supply would stay the same because no new money would be created.


What would happen if the Fed sells 5 billion worth of treasury bonds on the open market?

The money supply would stay the same because no new money would be created.


What effect will the feds sells 5 billion worth of treasury bonds on the open market have on the money supply?

The Federal Reserve Bank can buy and sell these bonds to raise or lower bank deposits.


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During the US Civil War the US Treasury Department needed to help finance the costs of the war. The successful Philadelphia banker Jay Cooke was given a contract to market the bonds. Cooke was charged with raising $500 million worth of bonds to the general public. Cooke was successful and at one point he was marketing $1 million worth of bonds per day.


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Adjusted for inflation, $1 of bonds then is worth $11 now.


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