What is the most powerful tool the Fed has for adjusting bank reserves?
A)Discount loans
B)Open-market operations
C)Simple money multiplier
D)None of the above

Question

Quizplus · Accepted Answer

Open-market operations are the most powerful tool the Fed has for adjusting bank reserves.
Key Takeaway: Open-market operations (also known as OMOs) are part of how the Fed controls the money supply. Through OMOs, the Fed buys and sells government securities like Treasury bonds and bills and other federal agency securities within the open market. Policy decisions about OMOs are made every six weeks by the Federal Open Market Committee.

What Is the Most Powerful Tool the Fed Has for Adjusting