Which of the following policy actions by the Fed would cause the money supply to increase?
A) An open market sale of government securities.
B) An increase in required reserve ratios.
C) An increase in the discount rate.
D) An open-market purchase of government securities.

Question

Quizplus · Accepted Answer

An open-market purchase of government securities injects reserves into the banking system, allowing banks to lend out more money, leading to an increase in the money supply.

Which of the Following Policy Actions by the Fed Would