The primary tools that the Federal Reserve uses to influence demand are

Question

Quizplus · Accepted Answer

The Federal Reserve primarily uses changes in interest rates as their tool to influence the demand for goods and services. By adjusting the federal funds rate, the Fed can impact borrowing costs for consumers and businesses, which in turn affects spending and investment decisions. The other options listed may indirectly impact demand, but they are not the primary tools used by the Fed.

The Primary Tools That the Federal Reserve Uses to Influence