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If during an economic expansion, U.S. financial investors begin to buy stocks increasing the demand for money, what action could the Federal Reserve take to

If during an economic expansion, U.S. financial investors begin to buy stocks increasing the demand for money, what action could the Federal Reserve take to prevent inflation in the economy?

  1. Increase the discount rate
  2. Decrease the discount rate
  3. Buy bonds on the open market
  4. Decrease the required reserve ratio
  5. Extend credit to overseas markets

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