To increase the money supply,the Fed might

Question

Quizplus · Accepted Answer

To increase the money supply, the Fed could decrease the reserve requirement and the discount rate. When the reserve requirement is decreased, commercial banks are required to hold fewer reserves, allowing them to lend out more money, thereby increasing the money supply. Lowering the discount rate makes borrowing from the Fed cheaper for banks, which encourages borrowing and increases the amount of money in circulation.

To Increase the Money Supply,the Fed Might