An acceleration in the growth rate of the money supply is known as ________.
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A. B. C. D. E.A
The Fed generally pumps additional money into the economy via open market operations - the purchase of bonds in the open market. The consequence of this action is usually a rise in the real interest rate. The Fed can also implement expansionary monetary policy through manipulation of the discount rate. A higher discount rate will serve to contract the money supply; a lower rate will expand the money supply.