1-22 Depository institutions serve as the primary conduit through which monetary policy actions impact the economy.

Question

Quizplus · Accepted Answer

Depository institutions, such as banks, play a crucial role in the implementation of monetary policy by adjusting their lending rates and deposit rates in response to changes in the target federal funds rate set by the Federal Reserve. These changes in turn impact the availability of credit and ultimately the level of economic activity.

1-22 Depository Institutions Serve as the Primary Conduit Through Which