Which of the following is the most frequently used tool of monetary policy?
A)Changing the discount rate
B)Changing reserve requirements
C)Open-market operations
D)Interest rate changes

Question

Quizplus · Accepted Answer

Open-market operations, which involve the buying and selling of government securities by the central bank, are the most frequently used tool of monetary policy. Changing the discount rate and reserve requirements are also tools used by central banks, but they are typically used less frequently than open-market operations. Interest rate changes can be a reflection of the central bank's monetary policy stance, but they are not a tool in and of themselves.

Which of the Following Is the Most Frequently Used Tool