26. The M1 money supply is typically larger than the M2 money supply.
a) True
b) False
Answer: b) False
27. When the money supply increases, it leads to a decrease in interest rates.
a) True
b) False
Answer: a) True
28. The Federal Reserve is responsible for controlling the money supply in the United States.
a) True
b) False
Answer: a) True
29. Commercial banks have the ability to create money through the process of lending.
a) True
b) False
Answer: a) True
30. Open market operations refer to the buying and selling of government securities by the central bank.
a) True
b) False
Answer: a) True
