Federal tax code instruments are not used by the federal reserve for changing the money supply, hence option c is correct.
When the FED purchases or sells current US treasury notes, it engages in open market activities.
The FED will purchase US treasury notes from individual investors if it wishes to expand the money supply. The money supply will be reduced, however, if the FED sells US Treasury notes.
Therefore, the federal tax code is instruments is not used by the federal reserve, hence option c is correct.
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