Which list contains only actions that decrease the money supply?
A) making open-market purchases; raising the reserve requirement ratio
B) making open-market purchases; lowering the reserve requirement ratio
C) making open-market sales; raising the reserve requirement ratio
D) making open-market sales; lowering the reserve requirement ratio

Question

Quizplus · Accepted Answer

Making open-market sales involves selling government securities, which takes money out of circulation, thus decreasing the money supply. Raising the reserve requirement ratio means banks must hold more reserves and can lend out less, also decreasing the money supply.

Which List Contains Only Actions That Decrease the Money Supply