Which of the following methods does the Federal Reserve System not use to control the money supply and the economy?
A) Buys government securities and bonds
B) Increases the reserve requirement
C) Increases the discount rate
D) Lends money to private businesses
E) Sells government securities and bonds

Question

Quizplus · Accepted Answer

The Federal Reserve System does not lend money directly to private businesses, as this falls outside of its mandate. Its primary tools for controlling the money supply and the economy are buying and selling government securities and bonds, increasing or decreasing the reserve requirement for banks, and adjusting the discount rate (the interest rate at which banks can borrow from the Federal Reserve).

Which of the Following Methods Does the Federal Reserve System