The Federal Reserve System regulates the money supply primarily by ________.
A. altering the reserves of commercial banks, largely through sales and purchases of government bonds
B. altering the discount rate and thereby the ability of the banks to make loans
C. restricting the issuance of Federal Reserve Notes because paper money is the largest portion of the money supply
D. altering the reserve requirements of commercial banks and thereby the ability of banks to make loans
Answer: A
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