Question

select the supply of reserves, the upper end of the demand for reserves, lower end of the demand for reserves, or both the upper and lower end of the demand for reserves. then selected the direction of the shift. score: 500 the federal reserve buys bonds on the open market. policy rate sr upper end pr dr lower end quantity of reserves

Explanation:

Step1: Identify policy action impact

When the Federal Reserve buys bonds on the open market, it injects reserves into the banking system, increasing the total quantity of reserves available.

Step2: Determine curve to shift

This action directly affects the supply of reserves ($S_R$), not the demand for reserves (the upper/lower ends of $D_R$ are tied to policy rate tools like discount rate and interest on reserves, which are not changed here).

Step3: Determine shift direction

An increase in available reserves means the supply curve of reserves shifts to the right (toward higher quantity of reserves).

Answer:

Supply of Reserves ($S_R$) shifts to the right.