Of the following,the major influence on the supply of money is
A)interest rates
B)prices
C)the transactions demand for money
D)GDP
E)the Fed

Question

Quizplus · Accepted Answer

The Federal Reserve (the Fed) has the ultimate authority and responsibility for controlling the supply of money in the economy. The Fed can influence the supply of money through a variety of tools, such as adjusting interest rates and implementing open market operations. While factors such as GDP and prices can also impact the supply of money, the actions of the Fed have a greater influence. The transactions demand for money is more of a factor in determining the demand for money, rather than the supply. Therefore, the best choice is E - the Fed.

Of the Following,the Major Influence on the Supply of Money