1. Which of the following would lead to a decrease in the money supply?
A. The Fed lowers the discount rate
B. The Fed sells government securities in the secondary market
C. The Federal government spends less money
D. The Fed lowers reserve requirements
E. Taxes are reduced
2. Currency held by the public…
A. Is not part of the money supply, but currency held by banks is B. Is part of M1 but not M2 C. Is part of the money supply, but currency held by banks is not D. And by banks is part of the money supply E. Or banks is not part of the money supply since it is not included in M1