Which of the Following Indicates the Primary Mechanism by Which

question 191

Multiple Choice

Which of the following indicates the primary mechanism by which the money supply expands?

• A) The U.S. Treasury prints additional currency.
• B) The Fed purchases additional bonds, which increases the reserves available to the banking system.
• C) The public decides to hold more currency rather than checking deposits.
• D) The U.S. government purchases additional gold.

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