Which of the following federal actions has the goal of reducing the money supply in markets?

A) The Federal Reserve liberalizes credit control actions on loans.
B) The Federal Reserve buys treasury bills from the market.
C) The Federal Reserve raises the discount rate.
D) The Federal Reserve reduces the reserve requirement.
E) The Federal Reserve promotes new loans to small businesses.

Answer: C
Explanation: The discount rate is the interest rate that member banks pay when they borrow funds from the Fed. Raising the discount rate discourages loans and therefore, tightens the money supply.