Which of the following measures taken by a central bank is most likely to expand the money supply?

Explanation

Option A involves increasing the discount rate, which typically reduces money supply. Option B is incorrect because not all actions increase money supply. Option C is correct; when the central bank buys government bonds, it injects liquidity into the economy, thereby increasing the money supply. Option D, raising reserve requirements, restricts the funds banks can lend, decreasing the money supply.