If the Federal Reserve sells S40,000 in Treasury bonds to a bank at 5% interest, what is the immediate effect on the money supply? Algebra 1 Answer Shwetank Mauria Feb 11, 2018 For selling #$40,000# in treasury bonds, Federal Reserve receives the market price of treasury bonds, say it is #$40,000#. Hence money supply in the market reduces by #$40,000#. Answer link Related questions How do I determine the molecular shape of a molecule? What is the lewis structure for co2? What is the lewis structure for hcn? How is vsepr used to classify molecules? What are the units used for the ideal gas law? How does Charle's law relate to breathing? What is the ideal gas law constant? How do you calculate the ideal gas law constant? How do you find density in the ideal gas law? Does ideal gas law apply to liquids? Impact of this question 2041 views around the world You can reuse this answer Creative Commons License