1. When the Federal Reserve buys bonds on the open market, it leads to _________ (increase/decreases) in the price of bonds. 2. To decrease the level of output, the Fed should conduct an open market...

1. When the Federal Reserve buys bonds on the open market, it leads to _________ (increase/decreases) in the price of bonds.

2. To decrease the level of output, the Fed should conduct an open market _________ (sale/purchase) of bonds.

3. An open market sale _________ the supply of money, which _________ interest rates, which _________ investment, and finally results in a(n) _________ in output.

4. A decrease in the supply for money will _________ (appreciate/depreciate) a country’s currency.