Respuesta :
The fed can influence the money supply by changing the interest rate it pays banks on the reserves they are holding. This statement is true.
What is money supply?
The Federal Reserve System and the U.S. Treasury issue currency, dollar bills and coins, as well as a variety of deposits that the general public holds at commercial banks and other depository organizations including thrifts and credit unions.
Money has a significant impact on economic activity since it is used in almost all economic transactions. A rise in the money supply has two effects: it lowers interest rates, which encourage investment, and it puts more money in the hands of consumers, which makes them feel wealthier and encourages consumption.
When the amount of money available or its rate of growth decreases, opposite impacts result. Disinflation (lower inflation) or deflation (falling prices) follow a reduction in economic activity.
Learn more on money supply here https://brainly.com/question/3625390
#SPJ1
