The Federal Reserve's primary tool for changing the money supply is _____. In order to increase the number of dollars in the U.S. economy (the money supply), the Federal Reserve will _____ government bonds.

The Federal Reserve's primary tool for changing the money supply is open market operations. In order to increase the number of dollars in the U.S. economy (the money supply), the Federal Reserve will buy government bonds

Buying government bonds from banks and others will send bonds from the banks and the market to the Fed. In exchange, cash will flow from the Fed to banks and markets. That infusion of cash is intended to raise the level of economic activity.