In the United States,the key policy lever of the Federal Reserve is ________.
A) conducting stress tests on banks
B) allowing or disallowing interbank transfers
C) the manipulation of the quantity of bank reserves
D) changing the reserve requirement

Question

Quizplus · Accepted Answer

The key policy lever of the Federal Reserve is the manipulation of the quantity of bank reserves through open market operations, such as buying or selling government bonds. This directly affects the federal funds rate, which in turn affects interest rates for loans and ultimately impacts the broader economy. The other options listed are tools used by the Federal Reserve, but they are not the primary policy lever used to influence the economy.

In the United States,the Key Policy Lever of the Federal