If the Fed wants to increase bank reserves,it can:
A) Buy bonds.
B) Raise the discount rate.
C) Raise the reserve requirement.
D) Sell bonds.

Question

Quizplus · Accepted Answer

If the Fed wants to increase bank reserves, it can buy bonds from banks. When the Fed buys bonds, it pays for them with new reserves that are deposited into the banks' accounts. This increases banks' reserve balances and their lending capacity.

If the Fed Wants to Increase Bank Reserves,it Can