An open market __________ by the Fed increases the money supply; a(n)__________ in the required reserve ratio increases the money supply.

Name: An open market __________ by the Fed increases the money supply; a(n)__________ in the required reserve ratio increases the money supply.
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Question

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An open market purchase by the Fed injects money into the banking system, increasing the money supply. Decreasing the required reserve ratio allows banks to lend more of their deposits, also increasing the money supply.

An Open Market __________ by the Fed Increases the Money