ECONOMICS
MONETARY POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Reserve Requirements, Open Market Operations, & the Discount Rate
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Printing Presses, Legislation, & Judicial Proceedings
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Advisory Counsel, FOMC-Federal Open Market Committee, & Secretary of the Treasury
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Capital, Accounts Payable and the Military Industrial Complex
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Detailed explanation-1: -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-2: -The Federal Reserve, America’s central bank, is responsible for conducting monetary policy and controlling the money supply. The primary tools that the Fed uses are interest rate setting and open market operations (OMO).
Detailed explanation-3: -Open market operations (OMOs)–the purchase and sale of securities in the open market by a central bank–are a key tool used by the Federal Reserve in the implementation of monetary policy. The short-term objective for open market operations is specified by the Federal Open Market Committee (FOMC).
Detailed explanation-4: -The Fed uses three primary tools in managing the money supply and pursuing stable economic growth. The tools are (1) reserve requirements, (2) the discount rate, and (3) open market operations. Each of these impacts the money supply in different ways and can be used to contract or expand the economy.
Detailed explanation-5: -Central banks have four main monetary policy tools: the reserve requirement, open market operations, the discount rate, and interest on reserves.