ECONOMICS
MONETARY POLICY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
required reserves
|
|
|
discount rate
|
|
|
printing new money
|
|
|
excess reserves
|
Detailed explanation-1: -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-2: -The Federal Reserve controls the three tools of monetary policy–open market operations, the discount rate, and reserve requirements.
Detailed explanation-3: -Which of the following is NOT one of the Fed’s monetary policy tools? The answer is c) changing the coupon rate. The discount rate, the required reserve ratio is determined by the Fed and the open market operation is also conducted by FED.
Detailed explanation-4: -Open Market Operations. Discount Window and Discount Rate. Reserve Requirements. Interest on Reserve Balances. Overnight Reverse Repurchase Agreement Facility. Term Deposit Facility. Central Bank Liquidity Swaps. More items •16-Dec-2021