if the fed sells government bonds to the public, then reserves\nincrease and the money supply…

if the fed sells government bonds to the public, then reserves\nincrease and the money supply increases.\nincrease and the money supply decreases.\ndecrease and the money supply increases.\ndecrease and the money supply decreases.

if the fed sells government bonds to the public, then reserves\nincrease and the money supply increases.\nincrease and the money supply decreases.\ndecrease and the money supply increases.\ndecrease and the money supply decreases.

Answer

Brief Explanations:

When the Federal Reserve (Fed) sells government bonds to the public, the public pays with money that is then taken out of circulation. This reduces the amount of reserves in the banking system as banks have less money on - hand. Since the money that was used to buy the bonds is no longer available for lending and spending, the money supply decreases.

Answer:

decrease and the money supply decreases.