Attempts Score / 5 48. Problems and Applications Q2 When the Fed sells bonds in open-market operations, it the money supply. If the Fed wants to decrease the money supply, it can the reserve requirement. When the Fed increases the interest rate it pays on reserves, the money supply will When the FOMC decreases its target for the federal funds rate, the money supply will If bankers decide to hold more excess reserves because they are fearful of bank runs, the money supply