15. The Fed receives interest income from its holdings of U.S. government bonds. When the Fed increases

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15. The Fed receives interest income from its holdings of U.S. government bonds. When the Fed increases the monetary base, does this action increase or decrease the Fed’s income from its securities portfolio? Other things equal, would you expect the Fed to favor increases in the monetary base or decreases in the reserve ratio as a means of increasing the money supply?

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