Which of the following is an appropriate monetary policy if the Fed wants to increase the money supply?
A) an increase in the required reserve ratio
B) an increase in the discount rate
C) purchases of bonds in open market operations
D) an increase in taxes on interest income

Question

Quizplus · Accepted Answer

Purchases of bonds in open market operations increase the money supply by injecting money into the economy. The other options would have the opposite effect of decreasing the money supply.

Which of the Following Is an Appropriate Monetary Policy If