[need complete the diagram below to show how the fed uses open market operations to change the money supply

Open market operations are the tecniques used by the Federal Reserve, and other monetary authorities, to modify the money supply, in other words, to modify the amount of money in circulation in the economy.

These operations consist on either buying or selling government bonds, depending on whether the aim is to increase or decrease the money supply, respectively. These market operations affect interest rates, which function as the price of money.

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