Question

10. To______

the money supply, the Fed could______
3 point
A. decrease; lower the reserve requirements
B. increase; lower the discount rate
C. increase; conduct open-market sales
D. decrease; lower the federal funds rate
E. decrease; raise income taxes.

Answer 1

Answer:When the Federal Reserve decreases the reserve ratio, it lowers the amount of cash that banks are required to hold in reserves, allowing them to make more loans to consumers and businesses. This increases the nation's money supply and expands the economy.

Step-by-step explanation: