which of the following increases when the fed makes open - market sales?\ncurrency and reserves\ncurrency…

which of the following increases when the fed makes open - market sales?\ncurrency and reserves\ncurrency but not reserves\nreserves but not currency\nneither currency nor reserves

which of the following increases when the fed makes open - market sales?\ncurrency and reserves\ncurrency but not reserves\nreserves but not currency\nneither currency nor reserves

Answer

Brief Explanations:

When the Fed makes open - market sales, it sells securities in the open market. Banks and the public pay for these securities with funds, which reduces the reserves in the banking system as banks transfer funds to the Fed. Currency in circulation is not directly affected by open - market sales in the short - run. So reserves decrease and currency remains unchanged.

Answer:

reserves but not currency