Which of the following Fed actions will increase the money supply?
A) open market purchases of Treasury notes
B) an increase in the required reserve ratio
C) an increase in the discount rate
D) all of the above
E) none of the above

Question

Quizplus · Accepted Answer

Open market purchases of Treasury notes increase the money supply by injecting more money into the economy. Option B would reduce the money supply by increasing the amount of reserves banks are required to hold. Option C would also reduce the money supply by making it more expensive for banks to borrow from the Fed.

Which of the Following Fed Actions Will Increase the Money