Which of the following actions would have the effect of increasing the supply of money and credit and lowering interest rates?
A)The Fed buys government securities.
B)The Fed raises the margin requirement.
C)The Fed raises the reserve requirement.
D)The Fed raises the discount rate.

Question

Quizplus · Accepted Answer

When the Fed buys government securities, it injects money into the banking system, increasing the supply of money and credit. This action typically leads to lower interest rates as there is more money available for lending.

Which of the Following Actions Would Have the Effect of Increasing