What causes or how does the money supply increase?

CUWu answered one year ago …

The money supply increases and decrease based on the fiscal and monetary policies of the Fed and the US Treasury. For instance, if the Fed raises rates then less people will borrow money (it costs too much) and the money supply will contract. And if they lower rates, more businesses will borrow and the money supply will expand.

The government can also increase taxes to decrease the money supply or start spending on private businesses to increase it.

Essentially it's all different tools at the government's disposal to help keep the economy from overheating or from falling into a recession.