Changing the discount rate is a very precise way for the central bank to control the supply of money.

Question

Quizplus · Accepted Answer

Changing the discount rate is a more general tool for influencing the money supply and is not considered very precise because its effects can be broad and unpredictable, impacting the willingness of banks to borrow from the central bank but not directly controlling the amount of money in circulation.

Changing the Discount Rate Is a Very Precise Way for the Central