The monetary base will increase for all of the following reasons EXCEPT
A)increase in discount loans.
B)increase in Federal Reserve Float.
C)increase in securities held by Fed.
D)increase in Treasury deposits at the Fed.

Question

Quizplus · Accepted Answer

An increase in Treasury deposits at the Fed actually reduces the monetary base because it means the government is holding more money at the Fed, which decreases the amount of money available in the banking system for lending.

The Monetary Base Will Increase for All of the Following