AP Macroeconomics › How to find the effect of government securities on money supply
Which of the following are considered open-market activities?
Selling Government Bonds
Decreasing Taxes
Increasing Government Spending
Raising Bank Reserve Requirements
None of these would be considered Open Market Activities
Selling Government Bonds would be considered open market activities. When the Federal Reserve wants to adjust interest rates, they conduct open market operations - which involves selling government bonds (which raises interest rates by decreasing the money supply) or buying government bonds (which lowers interest rates by increasing the money supply.)