The most important and frequently used tool of monetary policy is:
A) discount rate changes.
B) automatic stabilization.
C) open market operations.
D) changes in the reserve requirement.

Question

Quizplus · Accepted Answer

Open market operations are the most important and frequently used tool of monetary policy. They involve the buying and selling of government securities in the open market to influence the level of reserves in the banking system, which in turn affects interest rates and the overall money supply.

The Most Important and Frequently Used Tool of Monetary Policy