Monetary Aggregates and Money Supply

26. The M1 money supply is typically larger than the M2 money supply.

a) True

b) False

27. When the money supply increases, it leads to a decrease in interest rates.

a) True

b) False

28. The Federal Reserve is responsible for controlling the money supply in the United States.

a) True

b) False

29. Commercial banks have the ability to create money through the process of lending.

a) True

b) False

30. Open market operations refer to the buying and selling of government securities by the central bank.

a) True

b) False