Which of the following would cause an increase in M1?
A)a reduction in the required ratio of reserves to deposits
B)an increase in the discount rate
C)an open market operation where the Fed buys bonds
D)all of the above
E) none of the above

Question

Quizplus · Accepted Answer

When the Fed buys bonds in an open market operation, it injects money into the banking system, increasing the amount of money in circulation, which raises M1.

Which of the Following Would Cause an Increase in M1