Top shirts back link t-shirtat on 2019/12/14

It is when the Central Bank wants to decrease the money supply that it SELLS the Treasury bonds. When the Central Bank sells Treasury Bonds on the open market to whomever wants to purchase them, the money paid to Central Bank for those bonds becomes owned by the Central Bank at which point it is now out of the money supply. One could say that this shrinking of the money supply by selling bonds indirectly decreases support for Treasury borrowing.
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