To increase the money supply,the Fed could

Name: To increase the money supply,the Fed could
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Question

Quizplus · Accepted Answer

To increase the money supply, the Fed can decrease the reserve requirement. If the reserve requirement is lowered, banks are required to hold less money in reserve and can lend out more money, which increases the money supply. Selling government bonds would decrease the money supply, and increasing the discount rate would discourage borrowing and also decrease the money supply.

To Increase the Money Supply,the Fed Could