One method used by the Federal Reserve to prevent abuse of the discount facility is
A) higher bank taxes.
B) higher reserve requirements.
C) tighter bank surveillance.
D) selling fewer government securities to the banks involved.

Question

Quizplus · Accepted Answer

The Federal Reserve uses tighter bank surveillance as a method to prevent abuse of the discount facility, ensuring that banks are using it appropriately and not exploiting the system for undue advantage.

One Method Used by the Federal Reserve to Prevent Abuse