All else equal, the _____ the value of Treasury securities purchased by the Federal Reserve and the _____ the reserve requirement, the higher will be the amount of money created.

Question

Quizplus · Accepted Answer

When the Federal Reserve purchases a higher value of Treasury securities, it injects more money into the banking system, increasing the money supply. A lower reserve requirement allows banks to lend out a greater portion of their deposits, further amplifying the creation of money through the money multiplier effect.

All Else Equal, the _____ the Value of Treasury Securities