Question $6$ of $10$

anYou are Chair of the Federal Reserve Board. In your meeting with the Federal Open Market Committee, the committee

You reply that OMOs

are the purchase and sale of government securities$.$ To increase the money supply, we will buy government securities$,$ which increases the amount of reserves in the banking system and fuels deposit expansion.

are the purchase and sale of government securities$.$ To increase the money supply, we will sell government securities$,$ which increases the amount of reserves in the banking system and fuels deposit expansion.

refer to an increase or decrease of the required reserve ratio. Increasing the ratio will fuel deposit expansion and lead to an increase in the money supply.

refer to manipulating the rate at which the Federal Reserve Bank $($Fed$)$ loans money to member banks. An increase in the money supply occurs when the Fed lowers this rate, which increases the amount of excess reserves in the banking system.