The primary tool the Federal Reserve uses to increase the money supply is

Question

Quizplus · Accepted Answer

Of the options given, the primary tool the Federal Reserve uses to increase the money supply is buying Treasury securities. When the Federal Reserve buys these securities, it injects money into the economy in exchange for them. This increases the amount of money in circulation, and can lead to lower interest rates and increased lending. The other options listed (printing more money, lowering the required reserve ratio, and lowering the discount rate) can all also impact the money supply, but buying Treasury securities is generally considered the primary tool used by the Federal Reserve.

The Primary Tool the Federal Reserve Uses to Increase the Money