How does the Federal Reserve Board influence the supply of money in the economy?

Question

Quizplus · Accepted Answer

The Federal Reserve Board can influence the supply of money in the economy by changing the discount rate, which is the interest rate at which banks can borrow money from the Federal Reserve. If the discount rate is lowered, banks can borrow more money at a cheaper rate, which can increase their supply of money to loan out to borrowers. Conversely, if the discount rate is raised, banks may borrow less money and have less to lend out, which can decrease the supply of money in the economy.

How Does the Federal Reserve Board Influence the Supply of Money