The Federal Reserve System regulates the money supply primarily by:

A. controlling the production of coins at the U.S. mint.
B. altering the reserve requirements of commercial banks and thereby the ability of banks to
make loans.
C. altering the reserves of commercial banks, largely through sales and purchases of
government bonds.
D. restricting the issuance of Federal Reserve Notes because paper money is the largest
portion of the money supply.

C. altering the reserves of commercial banks, largely through sales and purchases of
government bonds.