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What would the Federal Reserve do when

it wants to increase the supply of
loanable funds?
a. Sell government securities
b. Increase the reserve requirement
c. Increase the discount rate
d. Decrease the reserve requirement

User Sehnsucht
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1 Answer

3 votes

Final answer:

The Federal Reserve increases the supply of loanable funds through open market operations.

Step-by-step explanation:

The Federal Reserve uses open market operations to increase the supply of loanable funds. When the Fed wants to increase loanable funds, it buys government securities in the open market. By buying these securities, the Fed injects new reserves into the banking system, increasing the supply of loanable funds.

User Simplylizz
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