Which of the following would NOT increase the supply of money in a fiat money economy?
A) The Federal Reserve decides to purchase existing Treasury securities.
B) The Federal Reserve decreases the required reserve ratio.
C) The Federal Reserve decreases the discount rate.
D) There is a discovery of gold.
E) The Federal Reserve decides to link the value of money to water (a commodity).

Question

Quizplus · Accepted Answer

In a fiat money economy, the supply of money is not directly affected by the discovery of gold, as fiat money is not backed by physical commodities like gold.

Which of the Following Would NOT Increase the Supply of Money