Which of the following Federal Reserve policy tools is used most often?

Question

Quizplus · Accepted Answer

Open market operations, which involve the buying and selling of government securities, are the most frequently used tool by the Federal Reserve to adjust the money supply and influence interest rates. This is because they are flexible, easily reversible, and have a direct impact on the financial system. Changing the required reserve ratio, changing the discount rate, and changing the prime lending rate can also be effective tools, but they are generally used less often and in more specific circumstances. Moral suasion, which involves informal persuasion and pressure, is not a formal policy tool of the Federal Reserve.

Which of the Following Federal Reserve Policy Tools Is Used