Which of the following tools of monetary policy is flexible and able to affect bank reserves quickly and by relatively specific amounts?

Question

Quizplus · Accepted Answer

Open-market operations involve the buying or selling of government securities by the central bank, which can quickly and specifically affect the level of bank reserves. This tool is flexible because the central bank can adjust the amount of securities bought or sold to achieve their desired effect on the money supply. The discount rate, reserve ratio, and federal funds rate also impact bank reserves and the money supply, but they are less flexible and less precise in their effects.

Which of the Following Tools of Monetary Policy Is Flexible