Which of the following federal actions has the goal of increasing the money supply in markets?
A) The Federal Reserve imposes more selective credit controls on loans.
B) The Federal Reserve buys Treasury bonds from the market.
C) The Federal Reserve raises the discount rate.
D) The Federal Reserve controls the issue of new loans.
E) The Federal Reserve increases the reserve requirement.
Answer: B
Explanation: Buying treasury bonds is an example of an open market operation. It will increase the money supply.
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