The Fed has the most control over:
A) the monetary base.
B) M1.
C) M2.
D) money market mutual funds.

Question

Quizplus · Accepted Answer

The Federal Reserve has the most control over the monetary base, which is the total amount of currency in circulation plus banks' reserves held on deposit at the Fed. The Fed can increase or decrease the monetary base by adjusting the amount of reserves in the banking system through open market operations, reserve requirements, and discount rates. This affects the money supply, interest rates, and overall economic activity. Therefore, option A is the best choice. The other options are indirectly influenced by the Fed's policies rather than being directly controlled.

The Fed Has the Most Control Over