Answer:
Reflection of order of operations when the Fed buys bonds on the open market:
a. Money supply increases, interest rates decrease, investment spending increases, AS shifts right.
Explanation:
When the Federal Reserve buys bonds on the open market, the action increases the money supply in the banks. This allows banks to increase loans, and investors will increase investments. It also increases the price of government securities and effectively reduces their interest rates, thereby decreasing the overall interest rates while promoting investments.
