Final answer:
The Federal Reserve Board can create a tight money market through contractionary measures such as raising interest rates, selling government securities, or increasing reserve requirements for banks.
Step-by-step explanation:
The Federal Reserve Board can create a tight money market by implementing contractionary monetary policy measures. This includes actions such as raising interest rates, selling government securities, or increasing reserve requirements for banks.
By raising interest rates, borrowing becomes more expensive, which discourages spending and investment. Through selling government securities, the Federal Reserve reduces the money supply in the economy. Increasing reserve requirements means that banks have to hold more money in reserve, leaving less available for lending.
These measures aim to reduce the money supply, making credit less available and tightening the overall money market.