Anonymous asked in Education & ReferenceHomework Help · 10 years ago

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if the head of central bank of japan wanted to extend the supply of money in japan in 2009, which of the following would do it? explain your answer. increase the required reserve ratio, decrease the required reserve ratio, increase the discount rate, decrease the discount rate, buy government securities in the open market, sell government securities in the open market?

1 Answer

  • 10 years ago
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    The money supply of any nation is determined by the number of Treasury securities held by investors, not by the amount of currency that exists. Therefore to expand the money supply, the central (or national) bank, buys more securities. It's called "quantitative easing"

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