If the federal reserve decided to lower interest rates, it could But bonds to ra

Question

If the federal reserve decided to lower interest rates, it could
But bonds to raise the money supply But bonds to lower the money supply Sell bonds to raise the money supply Sell bonds to lower the money supply
If the federal reserve decided to lower interest rates, it could
But bonds to raise the money supply But bonds to lower the money supply Sell bonds to raise the money supply Sell bonds to lower the money supply

But bonds to raise the money supply But bonds to lower the money supply Sell bonds to raise the money supply Sell bonds to lower the money supply

Explanation / Answer

Answer is Buy the bonds to raise the money supply.

Explanation:

With the increase in money supply, the price of money i.e. interest goes down. And this happens when the federal reserve buy the bonds from the market and release the cash.

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