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In recent years, there has been a significant increase in the US money supply. How does the Federal Reserve "increase" the US money supply in the most active way?

a. It runs the money printing presses longer.

b. It sells U.S. Treasury securities.

c. It buys U.S. Treasury securities.

d. It buys other country's securities.

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Related questions

Which of the following would not increase the supply of money in a fiat money economy?

a. The Federal Reserve sells gold.

b. The Federal Reserve decides to sell existing Treasury securities.

c. The Federal Reserve increases the required reserve ratio.

d. The Federal Reserve increases the discount rate.

e. Fewer deposits are made in banks.

When the Federal Reserve conducts open market operations, it...

A. buys or sells government bonds. The money supply increases when buys bonds and decreases when sells bonds.

B. manipulates the rate at which it loans to member banks. Higher rates increase the money supply and lower rates decrease the money supply.

C. increases or decreases the required reserve ratio. Increasing the ratio will fuel deposit expansion and an increase in the money supply.

D. buys and sells foreign currency. The money supply increases when purchasing occurs and decreases when selling occurs.

• In terms of the demand for money, the interest rate is:

A) the price of borrowing money. B) the return on money that is saved for the future. C) the rate at which current consumption can be exchanged for future consumption. D) the opportunity cost of holding money.

• When the Fed conducts open market operations, the Fed buys and sells government securities to:

A) the private sector. B) foreign countries only. C) state and local government agencies only. D) the U.S. Treasury.

An open-market purchase of government bonds by the Fed results in ________ in bank reserves and ________ in the supply of money.

A) an increase; a decrease B) a decrease; a decrease C) an increase; an increase D) a decrease; an increase •

A decrease in the required reserve ratio:

A) will increase the money supply. B) will decrease the money supply. C) will not change the money supply. D) will decrease the discount rate.

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