Which policy tool allows the Federal Reserve the greatest control over monetary policy?

Question

Quizplus · Accepted Answer

Open market operations allow the Federal Reserve to directly control and manipulate the money supply by buying and selling government securities in the open market. This is considered the most powerful tool as it allows the Fed to directly influence the amount of money in circulation, which can impact interest rates, inflation, and economic growth. The discount rate, reserve requirement, and lender of last resort are also important policy tools, but they do not provide the same level of direct control over monetary policy as open market operations.

Which Policy Tool Allows the Federal Reserve the Greatest Control