Which statement(s) is(are) true? I. Increasing the reserve requirement would decrease the money supply.
II) Decreasing the discount rate would decrease the money supply.
III) Buying government bonds would increase the money supply.
A) II only
B) III only
C) I and II only
D) I and III only

Question

Quizplus · Accepted Answer

Increasing the reserve requirement reduces the money banks can lend, decreasing the money supply. Buying government bonds injects money into the economy, increasing the money supply.

Which Statement(s) Is(are) True? I