Which of the following policy actions by the Fed is likely to cause the money supply to decrease?

Question

Quizplus · Accepted Answer

An open market sale by the Fed results in a decrease in the money supply, as it involves the Fed selling government securities to the public, thus decreasing the reserves held by banks and causing a decrease in the amount of money they can lend out. The other choices would result in an increase in the money supply.

Which of the Following Policy Actions by the Fed Is