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7. To decrease money supply, the Fed could a. increase the reserve requirement ratio. b. stabilize c. reduce d. eliminate 8. The the reserve requirement ratio, the the ultimate effect of any initial increase in money supply. a. lower; less b. lower; greater c. greater; less d. b and c 9. Assume that the reserve requirements ratio is 15%. An initial infusion of $150 million could result in a maximum change in the money supply of a. $150 million. b. $1 billion. c. \$1 million. d. $22.5 million. 10. If the Fed desires to the money supply using open market operations, it would instruct the trading desk to government securities. a. increase; purchase b. increase; sell c. decrease; purchase d. B and C 11. The Fed's preferred method of increasing or decreasing the money supply is to a. increase or decrease the amount of government securities in the secondary market b. adjust the discount rate c. adjust the reserve requirement ratio d. adjust the federal funds rate 12. The Fed can the level of spending as a means of stimulating the economy by the money supply. a. increase; decreasing b. decrease; increasing c. decrease; decreasing d. increase; increasing