Which List Contains Only Actions That Decrease the Money Supply

question 165

Multiple Choice

Which list contains only actions that decrease the money supply?

• A) making open-market purchases; raising the reserve requirement ratio
• B) making open-market purchases; lowering the reserve requirement ratio
• C) making open-market sales; raising the reserve requirement ratio
• D) making open-market sales; lowering the reserve requirement ratio

---

Definitions:

Cash Outflows

Money going out of a business for any expense, investment, or payment.

Financing Activities

Transactions involving raising capital and repaying it to owners, including issuing equity, settling loans, and paying dividends.

Common Stock

A form of corporate equity ownership, a type of security representing an ownership interest in a corporation.

Investing Activity

Refers to the purchase and sale of long-term investments and property, plant, and equipment, as well as lending money and collecting on those loans.