Scenario: It is the year 2035, and many people in the United States are very happy with the state of the economy.  Real GDP has risen steadily over the past year, unemployment is low, and workers are confident they will continue to be employed.  People are buying homes, refrigerators, cars, and everyday goods.  Inflation is rising though, and people are concerned that prices may be rising faster than their incomes.  Nonetheless, the stock market is rising and people remain confident.  Which of the following monetary policy combinations enacted by the FED would be appropriate to address this economic scenario?     Increase the money supply by buying bonds and increasing the discount rate Increase the money supply by buying bonds and increasing the discount rate Increase the money supply by buying bonds and decreasing the reserve ratio Increase the money supply by buying bonds and decreasing the reserve ratio Decrease the money supply by selling bonds and increasing the reserve ratio Decrease the money supply by selling bonds and increasing the reserve ratio Decrease the money supply by decreasing both the discount rate and the reserve requirement

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