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23 June, 20:17

9. Determine which of the following Fed actions

will increase the money supply: (a) lowering

the reserve requirement, (b) raising the reserve

requirement, (C) conducting an open market

purchase, (d) conducting an open market sale,

(e) lowering the discount rate relative to the

federal funds rate, (f) raising the discount rate

relative to the federal funds rate.

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Answers (1)
  1. 23 June, 21:05
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    A. lowering the reserve requirements

    C. conducting an open market purchase.

    E. lowering the discount rate relative to the federal funds rate.

    Explanation:

    The (Federal Reserve System) which serves as the Central bank in the United States has some functions it performs in the monetary stability of the economy of the country.

    Moreover, we will be highlighting some of the actions that the Fed do take to increase the supply of money to the economy of the United State Some of these are:

    Lowering the reserve requirements on the ratio applicable to increase money supplied to the economy.

    The Federal Reserve System conducts an open market purchase to increase the money supply into the economy by purchasing available government securities.

    The Federal Reserve System will have to lower the discount rate relative to the federal funds rate that is charged to increase more money available in the economy

    .
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