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How does the Federal Reserve control the money supply?

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by raising or lowering the discount rate


by minting more or less paper currency


by raising or lowering the reserve requirement


by buying and selling government bonds and treasury bills

Sagot :

The Federal Reserve controls the money supply by:

  • raising or lowering the discount rate.
  • by raising or lowering the reserve requirement.
  • by buying and selling government bonds and treasury bills.

What is Federal Reserve?

It should be noted that the Federal Reserve simply means the bank that oversees the economic affairs in a country.

Here, the Federal Reserve controls the money supply by raising or lowering the discount rate, raising or lowering the reserve requirement, and by buying and selling government bonds and treasury bills.

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