To reduce the money supply in the economy,the Fed would:
A) increase the discount rate.
B) carry out open market purchases.
C) carry out open market sales and/or lower the discount rate.
D) carry out open market purchases and/or lower the discount rate.

Question

Quizplus · Accepted Answer

Increasing the discount rate makes borrowing more expensive for banks, which in turn reduces the amount of money they can lend out, effectively reducing the money supply in the economy.

To Reduce the Money Supply in the Economy,the Fed Would