Which of the following lists two things that both decrease the money supply?
A) raise the discount rate,make open market purchases
B) raise the discount rate,make open market sales
C) lower the discount rate,make open market purchases
D) lower the discount rate,make open market sales

Question

Quizplus · Accepted Answer

Raising the discount rate and making open market sales both decrease the money supply. Raising the discount rate increases the cost of borrowing from the Federal Reserve, leading to a decrease in borrowing and a decrease in the money supply. Making open market sales involves the Fed selling government securities in the open market, which decreases the money supply by removing money from circulation.

Which of the Following Lists Two Things That Both Decrease