The Federal Reserve policy tool under which the Fed attempts to bring psychological pressure to bear on individuals and institutions to conform to the Fed's policies using letters,phone calls,and speeches is known as:

Question

Quizplus · Accepted Answer

Moral suasion is a policy tool used by the Federal Reserve to persuade or influence individuals and institutions to conform to its policies. The Fed can employ moral suasion through letters, phone calls, and speeches to convince banks to increase lending, or to persuade the public to invest in certain securities. It is a soft tool since the Fed cannot force entities to comply, but it can create the psychological pressure necessary to achieve its goals.

The Federal Reserve Policy Tool Under Which the Fed Attempts