Which of the following direct actions could the Fed take to attempt to decrease the money supply?
A) Purchase U.S. government bonds
B) Decrease the federal funds rate
C) Decrease the reserve requirement
D) Coordinated intervention
E) Increase the discount rate

Question

Quizplus · Accepted Answer

Increasing the discount rate makes it more expensive for banks to borrow money from the Federal Reserve, which can lead to a decrease in the money supply as banks may reduce lending to conserve or raise capital.

Which of the Following Direct Actions Could the Fed Take