A combination of Fed purchases of government securities and an increase in reserve requirements would:

Question

Quizplus · Accepted Answer

The combination of Fed purchases of government securities (which would typically increase the money supply by injecting more money into the banking system) and an increase in reserve requirements (which would decrease the money supply by requiring banks to hold more reserves and thus lend out less) could have offsetting effects, making the overall impact on the money supply indeterminate without more information.

A Combination of Fed Purchases of Government Securities and an Increase