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2 years ago

Which of the following explains why the money supply is not completely controlled

1 answer:

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Money is very essential. The statement that explains why the money supply is not controlled is that the actions of private individuals and banks can increase or decrease the money supply via the money multiplier.

Money supply is known to handle all the value of monetary assets in an economy.

Monetary means used includes the most liquid asset in the economy such as cash and reserve deposits.

Money supply in an economy is said to be be estimated by the equation below:

Money supply = monetary base x money multiplier

See full question below

Which of the following explains why the money supply is not completely controlled by the Federal Reserve?

a. The actions of private individuals and banks can increase or decrease the money supply via the money multiplier.

b. The president can issue an executive order that can increase or decrease the money supply.

c. The treasury has say over when the Federal Reserve can increase or decrease the money supply.

d. The actions of private individuals and banks can increase or decrease the money supply via the spending multiplier.

e. Congress has authority to veto any monetary policy enacted by the Federal Reserve.

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