Economic-Which of the following Fed actions will increase the money supply? thank you?

Question

Which of the following Fed actions will increase the money supply?

open market purchases of Treasury notes

an increase in the required reserve ratio

an increase in the discount rate

all of the above

none of the above

Answer 1

open market purchases of Treasury notes

Purchasing treasury bonds FED pays money for it to public or money institutions, thus money supply "on hands" increases.

Answer 2

Purchases of treasury notes will directly increase the money supply. It will cause inflation. The other 2 factors will more likely result in a tightening of the money supply.