The tools of monetary policy available to the Fed include each of the following, except the:

Question

Quizplus · Accepted Answer

The currency-to-deposit ratio is not a tool of monetary policy used by the Fed. The other options (discount rate, target federal funds rate, and reserve requirement) are all tools used by the Fed to influence the economy and monetary policy. The discount rate is the interest rate at which banks can borrow money directly from the Fed. The target federal funds rate is the interest rate at which banks lend and borrow money from each other overnight. The reserve requirement is the percentage of deposits that banks are required to hold in reserve.

The Tools of Monetary Policy Available to the Fed Include