Which of the following changes to the money supply can the government take to stimulate a slowing of the economy?(1 point)

Question

Responses

It can increase the money supply by decreasing the reserve requirement.
It can increase the money supply by decreasing the reserve requirement.

It can increase the money supply by selling bonds in the open market.
It can increase the money supply by selling bonds in the open market.

It can decrease the money supply by increasing the discount rate.
It can decrease the money supply by increasing the discount rate.

It can decrease the money supply by buying bonds in the open market.
It can decrease the money supply by buying bonds in the open market.
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Answer 1

To stimulate a slowing economy, the government can take the following action:

It can increase the money supply by decreasing the reserve requirement.

Decreasing the reserve requirement allows banks to lend more of their deposits, increasing the overall money supply in the economy, which can help stimulate economic activity.

The other options listed either decrease the money supply or are incorrect actions for stimulation.