According to our discussion, the most widely used monetary policy tool used by the Federal Reserve...
According to our discussion, the most widely used monetary policy tool used by the Federal Reserve is ___________.
A- altering the discount rate
B- altering the reserve requirements
C- altering the money supply
D- altering marginal tax rates
Homework Answers
The most widely used monetary policy tool used by the Federal Reserve is altering the discount rate.
The Fed meets 8 times a year, reviews the economic data, and takes action by increasing or decreasing the discount rate. If there is an economic slowdown, then the Fed decreases the discount rate and if the inflation is too high, then the Fed increases the discount rate.
Options B, C, and D are incorrect because they are not widely used by the Fed.
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