ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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interest rates, taxes, government purchases, and transfers.
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currency, near-moneys, and reserve ratio.
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reserve requirements, the discount rate, and open-market purchases.
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None of the above
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Detailed explanation-1: -Monetary policy is commonly classified as either expansionary or contractionary. The Federal Reserve commonly uses three strategies for monetary policy including reserve requirements, the discount rate, and open market operations.
Detailed explanation-2: -The Fed has traditionally used three tools to conduct monetary policy: reserve requirements, the discount rate, and open market operations. In 2008, the Fed added paying interest on reserve balances held at Reserve Banks to its monetary policy toolkit.
Detailed explanation-3: -Central banks have four main monetary policy tools: the reserve requirement, open market operations, the discount rate, and interest on reserves. 1 Most central banks also have a lot more tools at their disposal.
Detailed explanation-4: -The Federal Reserve uses three tools of monetary policy (open market operations, discount lending, and reserve requirements) to control the money supply and interest rates.
Detailed explanation-5: -The key pillars of macroeconomic policy are: fiscal policy, monetary policy and exchange rate policy. This brief outlines the nature of each of these policy instruments and the different ways they can help promote stable and sustainable growth.