Which of the following are policy instruments available to the Fed as it tries to achieve its macroeconomic goals?
I. government expenditure on goods and services and taxes
ii. the government budget deficit or surplus
Iii. changes in the federal funds rate
A)ii only
B)iii only
C)i and ii
D)i and iii
E)ii and iii

Question

Which of the following are policy instruments available to the Fed as it tries to achieve its macroeconomic goals?
I. government expenditure on goods and services and taxes 
ii. the government budget deficit or surplus
Iii. changes in the federal funds rate
A)ii only
B)iii only
C)i and ii
D)i and iii
E)ii and iii

Quizplus · Accepted Answer

The Federal Reserve (the Fed) primarily uses monetary policy tools, such as changes in the federal funds rate, to achieve its macroeconomic goals. Government expenditure, taxes, and budget deficits or surpluses are fiscal policy tools, which are managed by the government, not the Fed.

Which of the Following Are Policy Instruments Available to the Fed