In the 1970s in response to recessions caused by an increase in the price of oil,the central banks in many countries increased the money supply.The central banks might have done this by

Question

Quizplus · Accepted Answer

To increase the money supply, central banks would purchase bonds on the open market, which would inject money into the economy and lower the value of money. Selling bonds on the open market would have the opposite effect, reducing the money supply and raising the value of money. Therefore, options A and C are incorrect. Option B is also incorrect as it suggests that purchasing bonds would raise the value of money, which is not the desired outcome for increasing the money supply.

In the 1970s in Response to Recessions Caused by an Increase