Which of the following will decrease the money supply?

Question

Quizplus · Accepted Answer

An increase in the discount rate makes borrowing from the Federal Reserve more expensive for banks, leading them to hold more reserves and lend less, which decreases the money supply. Increasing the required reserve ratio directly reduces the amount of funds banks can lend out, also decreasing the money supply. An open market purchase by the Fed actually increases the money supply by injecting liquidity into the banking system, making it the incorrect choice for actions that decrease the money supply.

Which of the Following Will Decrease the Money Supply