The Federal Reserve generally uses ________ to implement monetary policy.
A) reserve requirements
B) open market operations
C) fiscal policy
D) discount policies
E) government spending and taxes

Question

Quizplus · Accepted Answer

The Federal Reserve primarily uses open market operations, which involves buying and selling government securities in the open market, to implement monetary policy. This affects the money supply and interest rates, which in turn can influence overall economic activity. While reserve requirements, discount policies, and government spending and taxes can also influence the economy, they are not typically used as the primary tools of the Federal Reserve for implementing monetary policy. Fiscal policy, which involves government spending and taxes, is generally determined by the legislative and executive branches of government rather than the Federal Reserve.

The Federal Reserve Generally Uses ________ to Implement Monetary Policy