If the Fed wanted to expand the money supply as part of an antirecession strategy, it could
A) increase the reserve requirements.
B) buy U.S. securities on the open market.
C) raise the discount rate.
D) sell U.S. securities on the open market.

Question

Quizplus · Accepted Answer

To expand the money supply, the Fed can buy U.S. securities on the open market. This increases the money supply by injecting new money into the economy. Increasing reserve requirements or raising the discount rate would have the opposite effect, decreasing the money supply. Selling U.S. securities would also decrease the money supply.

If the Fed Wanted to Expand the Money Supply as Part