Asked by
Saundra Johnson
on Nov 11, 2024
Verified
The primary tool the Fed uses to control the money supply today is:
A) the discount rate.
B) the required reserve ratio.
C) the discount window.
D) chartering.
E) open market operations.
Open Market Operations
Monetary policy actions where central banks buy or sell government securities in the open market to control the money supply and interest rates.
Money Supply
The overall pool of economic resources in terms of money available at a particular time in an economy, including coins, paper money, and deposits in savings and checking accounts.
Fed
Short for the Federal Reserve, which is the central banking system of the United States, responsible for monetary policy.
- Familiarize yourself with the ways in which the Federal Reserve's maneuvers, particularly open market operations, modify the money supply.
- Acquire knowledge about the responsibilities and devices used by the Federal Reserve to manage the money supply.
Verified Answer
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Learning Objectives
- Familiarize yourself with the ways in which the Federal Reserve's maneuvers, particularly open market operations, modify the money supply.
- Acquire knowledge about the responsibilities and devices used by the Federal Reserve to manage the money supply.