To change the rate of growth of the money supply, the Fed can do all but which one of the following?

Question

Quizplus · Accepted Answer

The Fed can use open market operations, changing the discount rate, and changing the required reserve ratio to influence the rate of growth of the money supply. However, it cannot directly shift the demand for money curve by changing the interest rate. The demand for money curve is determined by economic factors such as the level of income, the price level, and financial innovation. The Fed can indirectly affect the demand for money by influencing these factors through its policies.

To Change the Rate of Growth of the Money Supply