The Federal Reserve changes the risk-free interest rate most directly
A) by changing the reserve requirement.
B) by changing the federal funds rate.
C) by changing the discount rate.
D) with open-market operations.

Question

Quizplus · Accepted Answer

The Federal Reserve most directly changes the risk-free interest rate through open-market operations, which involve buying or selling government securities to influence the federal funds rate.

The Federal Reserve Changes the Risk-Free Interest Rate Most Directly