The primary tools of the Federal Reserve monetary policy include all of the following except
A) changing the discount rates.
B) open market operations.
C) changes in reserve requirements.
D) changes in the Federal Funds rate.
E) All of the above are monetary policy tools used by the Fed.

Question

Quizplus · Accepted Answer

The Federal Reserve does not directly change the Federal Funds rate; instead, it influences this rate through open market operations, changes in the discount rate, and reserve requirements. The Federal Funds rate is determined by the market, based on the supply and demand for reserves.

The Primary Tools of the Federal Reserve Monetary Policy Include