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NEW QUESTION: 1
Which of the following correctly lists the three ways to increase the money supply?
A. Lower the required reserve ratio, increase the discount rate, buy bonds in the open market.
B. Raise the required reserve ratio, increase the discount rate, sell bonds in the open market.
C. Lower the required reserve ratio, decrease the discount rate, buy bonds in the open market.
D. Raise the required reserve ratio, increase the discount rate, buy bonds in the open market.
Answer: C
Explanation:
Choice "d" is correct. The three ways the Fed can increase the money supply are: (1) buy (purchase)
government securities in the open market, (2) lower the discount rate, and (3) lower the required reserve
ratio.
Choice "a" is incorrect, per above Explanation: .
Choice "b" is incorrect, per above Explanation: .
Choice "c" is incorrect, per above Explanation: .