Which of the following actions by the FED would increase the money supply?
A) Reducing the required reserve ratio.
B) Selling bonds in the open market.
C) Increasing the discount rate.
D) None of the above.

Question

Quizplus · Accepted Answer

Reducing the required reserve ratio would allow banks to hold less money in reserve and lend out more, increasing the money supply. Selling bonds in the open market and increasing the discount rate would both decrease the money supply.

Which of the Following Actions by the FED Would Increase