In practice, the primary tool used by the Federal Reserve to control the money supply is
A) discount lending.
B) the reserve requirement.
C) open market operations.
D) buying commercial paper.

Question

Quizplus · Accepted Answer

Open market operations, which involve the buying and selling of government securities, are the primary tool used by the Federal Reserve to control the money supply. This method allows for quick adjustments to the money supply to influence short-term interest rates and the economy.

In Practice, the Primary Tool Used by the Federal Reserve