Which of the following policy actions by the Fed would cause the money supply to decrease?
A)An open-market purchase.
B)A decrease in required reserve ratios.
C)A decrease in the discount rate.
D)None of these.

Question

Quizplus · Accepted Answer

An open-market purchase, a decrease in required reserve ratios, and a decrease in the discount rate all increase the money supply. Therefore, none of these actions would cause the money supply to decrease.

Which of the Following Policy Actions by the Fed Would