Which one of the following actions taken by the central bank would NOT reduce the country's money supply?
A) Raise the discount rate.
B) Raise the reserve requirement.
C) Buy bonds on the open market.
D) Raise the interest rate that the Federal Reserve pays banks on their deposits at the Fed.

Question

Quizplus · Accepted Answer

Buying bonds on the open market injects liquidity into the banking system, increasing the money supply rather than reducing it.

Which One of the Following Actions Taken by the Central