Which of the Following Actions by the Fed Would Lead

question 271

Multiple Choice

Which of the following actions by the Fed would lead to an increase in the money supply?

• A) An increase in the required reserve ratio
• B) An increase in the differential between the discount rate and the federal funds rate
• C) An increase in tax rates
• D) The purchase of government securities

---

Definitions:

Hydrogen Ion

A positively charged ion (H+) formed when a hydrogen atom loses its electron.

Bufferin

A brand of aspirin that contains a buffering agent to prevent stomach irritation.

Acetyl Salicylic Acid

A chemical compound better known as aspirin, used as an anti-inflammatory, analgesic, and antipyretic.

Buffer

Substance or group of substances that tend to resist pH changes of a solution, thus stabilizing its relative acidity and basicity.