The Fed
A)controls discount policy more completely than it controls open market operations.
B)must abide by discount rates set by Congress.
C)controls discount policy less completely than it controls open market operations.
D)controls discount policy completely, just as it controls open market operations.

Question

Quizplus · Accepted Answer

While the Fed sets the discount rate, banks have the choice of whether or not to utilize it. Open market operations, on the other hand, directly impact the money supply and interest rates. Therefore, the Fed has more control over open market operations than over discount policy.