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

Question

Quizplus · Accepted Answer

The Federal Reserve (Fed) directly influences the economy through monetary policy, primarily by setting the federal funds rate, not through fiscal policy measures like government expenditures, taxes, or budget deficits/surpluses.

Which of the Following Are Policy Instruments Available to the Fed