Federal Reserve increases money supply by

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Federal Reserve increases money supply by

A. selling treasury bills

B. buying treasury bills

C. selling Swiss bills

D. buying Swiss bills

Answer: Option B

Solution (By Examveda Team)

Federal Reserve increases money supply by buying treasury bills. Treasury Bills, also known as T-bills are the short-term money market instrument, issued by the central bank on behalf of the government to curb temporary liquidity shortfalls.

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