Which of the following will increase the money supply? Question 17 options: an increase in the discount rate (relative to the federal funds rate) a decrease in the required reserve ratio an open market sale by the Fed a and c b and c

a decrease in the required reserve ratio

Explanation:

The Federal Reserve utilises various strategies to control money supply to the economy. Money supply is the amount of money that is held by by the public in an economy.

The various methods used by the Federal Reserve to regulate money supply includes discount rate, reserve ratio, and open market operations.

Money supply will increase when the reserve ratio for commercial banks is decreased. This means less of their funds is required to be witheld from the public.

On the other hand an open market sale will mop up the cash in the economy, and an increase in discount rate (rate of lending to banks) will also cause a decrease in money supply.

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explanation:

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