b. banks reserves decrease. When the Fed wants to increase excess reserves held by banks, it does what? Select one: a. rises; falls When fed sells securities, this reduces money supply in the economy, increasing interest rates and reducing demand for loans. c. both an asset and a liability for the bank. b. a liability for the bank. By Drawing Money Out Of Circulation C. By Decreasing Member Bank Profits Not Distributed By The Fed D. By Decreasing Reserves In Bank Accounts At The Fed ____ 16. 76. When the Fed sells government securities to a bank, the a. banks reserves increase. c. the magnitude of the Fed's assets is unaffected by the sale, and only the composition is affected. When the Fed sells government securities in the open market, there is less currency in the hands of the banking community, as some money must be used buy these bonds. The Federal Reserve buys and sells Government securities. When the central bank sells government bonds, it is essentially taking money from the public and placing it out of circulation. When The Fed Sells Government Securities To The Banks, How Does It Usually Receive Payment For The Securities? c. banks reserves do not change. d. securities are an asset for the bank. By lowering the discount rate, the Federal Reserve . Open market operations are one way the Federal Reserve adjusts the money supply. The Federal Reserve. The Federal Reserve, America's central bank, is responsible for conducting monetary policy and controlling the money supply. A. rises; do not change d. When the Fed sells government securities to a bank, a. the Fed's assets and liabilities decrease by the amount of the sale. d. neither an asset nor a liability for the bank. 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