Question

Using monetary policy, the Federal Reserve increases to reduce the money supply in the economy.

Answer 1

Answer using CONTRACTIONARY monetary policy , the federal reserve increases INTEREST RATES to reduce the money supply in the economy

Step-by-step explanation:

Answer 2

Reserve Ratio

Step-by-step explanation:

Using monetary policy, the Federal Reserve increases Reserve Ratio to reduce the money supply in the economy.

The reserve ratio determines the reserve amounts required, by the Federal Reserve, to be held in cash by banks. This money is kept aside by the bank and is not available to be loaned out to the general public. If the Reserve Ratio is increased, more money will be held in reserves hence a reduction in the money supply in the economy.