2 Points
Which of the following best explains why Treasury bonds have an effect on
the size of the money supply?
O
A The Federal Reserve Bank can buy and sell these bonds to raise or
lower bank deposits
B. The amount of Treasury bonds in circulation affects both
unemployment and inflation
O
C. The interest paid on Treasury bonds influences the interest rates
charged by private banks.
O
D. The government can spend more money and charge lower taxes
by using Treasury bonds