To change the money supply, the Federal Reserve most frequently uses:

Question

Quizplus · Accepted Answer

The most frequently used tool by the Federal Reserve to change the money supply is open-market operations, which involve the buying and selling of government securities to either increase or decrease the amount of money available in the economy. Changes in required reserve ratios and the discount rate are less frequently used tools, and changes in the inflation rate are not a tool used by the Federal Reserve.

To Change the Money Supply, the Federal Reserve Most Frequently