If the Fed wants to increase the money supply,it will typically:
A) raise interest rates.
B) increase the money multiplier.
C) extend new loans.
D) purchase additional government bonds.

Question

Quizplus · Accepted Answer

The Fed can increase the money supply by purchasing additional government bonds from banks. This increases the reserves of banks, allowing them to lend out more money and therefore increasing the money supply.

If the Fed Wants to Increase the Money Supply,it Will