How can the Federal Reserve control money supply? (Select all that apply.)

A - print more money

B - interest rate manipulation

C - open market operations

D - adjust reserve ratios

C. open market operations, B. interest rate manipulation and D. adjust reserve ratios

Explanation:

The Federal Reserve control money supply by buying and selling of government securities. This is called open market operations. Buying of treasury bills from banks and securities providers it will increase the money supply in the economy. In changing the interest rate, Fed can give banks more reserves by lowering the interest rate it charges on banks allowing them to borrow more. Fed can discourage banks from borrowing more through raising the interest rate. Reserve ratio is a percentage value that banks reserves should show/hold relative to deposits. When the reserve ratio decreases, the bank is going to led more to clients thus increasing the money supply in the economy. Increased reserve ratio will make the banks to led less to cliets thus reducing the money supplting in the economy.

Best of Luck!