When the Fed increases or decreases the money supply,these actions are called

Question

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When the Fed increases or decreases the money supply, it does so through open market operations. This involves buying or selling government securities on the open market, which affects the amount of reserves in the banking system and therefore the money supply. Option A (discounting) refers to the Fed lending money to commercial banks, option B (money printing) is not a term used by economists to describe monetary policy, option C (moral suasion) is the Fed using persuasion rather than direct actions to influence economic behavior, and option E (interest payments) refers to the payment of interest on reserves held by banks at the Fed, which can also affect the money supply but is not the primary method the Fed uses to conduct monetary policy.

When the Fed Increases or Decreases the Money Supply,these Actions