1. When the FOMC shifts to loose or expansionary monetary policy stance, the FOMC has decided to ____________ (increase or decrease) the money supply. To do this they could use the following monetary policy (check all viable options):

• Purchase bonds from banks and the public
• Sell bonds to banks and the public
• Increase reserve requirements
• Reduce reserve requirements
• Increase the Discount Rate
• Lower the Discount Rate
• Increase the Target Federal Funds Rate
• Decrease the Target Federal Funds Rate