In Nov 2010, the Fed purchased $600 billion of long term Treasury bonds from primary dealers What were the consequences of this purchase The money supply increased by $600 billion Moreover, the demand for long term treasury bonds increased, leading to higher prices of long term treasury bonds and higher interest rates on those bonds The borrowed reserves increased by $600 billion Moreover, the demand for long term treasury bonds increased, leading to higher prices of long term treasury bonds and lower interest rates on those bonds The money supply decreased by $600 billion Moreover, the demand for long term treasury bonds increased, leading to higher prices of long term treasury bonds and lower interest rates on those bonds The nonborrowed reserves increased by $600 billion Moreover, the demand for long term treasury bonds increased, leading to higher prices of long term treasury bonds and lower interest rates on those bonds The borrowed reserves decreased by $600 billion Moreover, the demand for long term treasury bonds decreased, leading to higher prices of long term treasury bonds and lower interest rates on those bonds

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Posted on Jul 03, 2024

In Nov 2010, the Fed purchased $600 billion of long-term Treasury bonds from primary dealers. What were the consequences of this purchase?

		The money supply increased by $600 billion. Moreover, the demand for long-term treasury bonds increased, leading to higher prices of long-term treasury bonds and higher interest rates on those bonds.
		The borrowed reserves increased by $600 billion. Moreover, the demand for long-term treasury bonds increased, leading to higher prices of long-term treasury bonds and lower interest rates on those bonds.
		The money supply decreased by $600 billion. Moreover, the demand for long-term treasury bonds increased, leading to higher prices of long-term treasury bonds and lower interest rates on those bonds.
		The nonborrowed reserves increased by $600 billion. Moreover, the demand for long-term treasury bonds increased, leading to higher prices of long-term treasury bonds and lower interest rates on those bonds.
		The borrowed reserves decreased by $600 billion. Moreover, the demand for long-term treasury bonds decreased, leading to higher prices of long-term treasury bonds and lower interest rates on those bonds.