The Federal Reserve controls:

Question

Quizplus · Accepted Answer

The Federal Reserve controls all three of these monetary policy tools. The discount rate is the interest rate at which banks can borrow from the Federal Reserve, the monetary base is the amount of currency and reserves in the economy, and the reserve ratio determines how much of their deposits banks are required to hold in reserve. By changing these tools, the Fed can either increase or decrease the money supply in the economy, which can have an impact on economic growth, inflation, and employment levels.

The Federal Reserve Controls