Federal Reserve policy tools include all of the following EXCEPT
A) desired reserve ratios.
B) required reserve ratios.
C) the discount rate.
D) open market operations.

Question

Quizplus · Accepted Answer

The Federal Reserve does not set desired reserve ratios, which are determined by individual banks based on their own liquidity needs and risk management strategies. The Fed does set required reserve ratios, the discount rate, and conducts open market operations as part of its monetary policy tools.

Federal Reserve Policy Tools Include All of the Following EXCEPT