A basic policy instrument that the Fed uses to execute monetary policy is which of the following?
A) changing bank interest rates.
B) changing the lending/discount rate.
C) issuing securities.
D) buying loans from mortgage banks.

Question

Quizplus · Accepted Answer

The Fed uses the lending/discount rate as a basic policy instrument to execute monetary policy by influencing the cost of borrowing for banks, which in turn affects overall economic activity.

A Basic Policy Instrument That the Fed Uses to Execute