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4. Problems and Applications Q2 If the Fed wants to increase the money supply, it can bonds in open-market operations. If the Fed reduces the

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4. Problems and Applications Q2 If the Fed wants to increase the money supply, it can bonds in open-market operations. If the Fed reduces the reserve requirement, the money supply increases When the Fed increases the interest rate it pays on reserves, the money supply will When the FOMC decreases its target for the federal funds rate, the money supply will increase When Citibank repays a loan it had previously taken from the Fed, it the money supply

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