Which of the following explains why the money supply is not completely controlled by the Federal Reserve?
A) The actions of private individuals and banks can increase or decrease the money supply via the money multiplier.
B) The president can issue an executive order that can increase or decrease the money supply.
C) The treasury has say over when the Federal Reserve can increase or decrease the money supply.
D) The actions of private individuals and banks can increase or decrease the money supply via the spending multiplier.
E) Congress has authority to veto any monetary policy enacted by the Federal Reserve.

Question

Quizplus · Accepted Answer

The money supply can be increased or decreased through the money multiplier effect, which is influenced by the actions of private individuals and banks. Therefore, the Federal Reserve does not have complete control over the money supply.

Which of the Following Explains Why the Money Supply Is