Which Federal Reserve action would pump money into the economy?

Buying government securities in the open market is a primary method used by the Federal Reserve to influence monetary policy and inject liquidity into the economy. When the Federal Reserve purchases government securities, it pays for these securities by adding credit to the banks' reserves. This action increases the amount of money that banks have available to lend, effectively injecting more money into the economy.

This process is part of what is known as open market operations, which are a key tool in monetary policy. By increasing the money supply, the Federal Reserve aims to stimulate economic growth, encouraging spending and investment. Such actions can help lower interest rates, making borrowing more attractive for consumers and businesses, which further supports economic activity.

The other options relate to actions that would typically constrain or regulate the money supply rather than pump money into the economy. For example, raising the discount rate and increasing the reserve requirement would reduce the amount of money available for banks to lend, while increasing IRS enforcement of income under-reporting does not directly affect the money supply or liquidity in the banking system.