If commercial banks grant loans, a) the money supply is increased Ob) total reserves are increased O c) excess reserves are increased d) the money supply is reduced The tools of monetary policy include Oa) open market operations Ob) the purchase of corporate stock c) the federal government deficit d) taxation During a period of recession the Federal Reserve 1. increases the federal funds rate 2. buys government securities 3. sells government securities 4. Towers the federal funds are a) 1 and 2 b) 1 and 3 c) 2 and 4 d) 3 and 4