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Topic: Business
Number of pages / Number of words: 13 / 3425
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The Feds mandate this ratio. If the ratio is decreased, banks are required to hold lesser amounts in reserve which increases the amount of money in circulation. The inverse of this relationship also holds true. Open market operations are comprised of T-bills, bonds and other federal instruments that are sold to investors...


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Sales of these instruments typically drain money out of the system. Similarly, buying these instruments releases money into the system.

"The money supply has affects the macro-economic indicators. Three of the leading economic indicators are the Real Gross-Domestic Product (GDP), the inflation rate and the Unemployment rate...


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