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Which of the Following Combinations Would Unambiguously Increase the Supply

Question 74

Multiple Choice

Which of the following combinations would unambiguously increase the supply of money?


A) ​The Fed pays a higher interest rate on bank reserves and increases the required reserve ratio.
B) ​The Fed conducts an open market purchase of government securities and raises the discount rate.
C) ​The Fed pays a higher interest rate on bank reserves and conducts an open market purchase of government securities.
D) ​All of the above would produce conflicting effects on the supply of money

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