Which of the following actions by the Fed would cause the money supply to increase?
A) purchases of government bonds from banks
B) an increase in the reserve requirement
C) an increase in the discount rate
D) sales of government bonds to the public

Question

Quizplus · Accepted Answer

Purchases of government bonds from banks inject money into the banking system, increasing the reserves and enabling banks to create more loans, which in turn increases the money supply.

Which of the Following Actions by the Fed Would Cause