Which of the following would not fall under the description of unconventional monetary policy by the Federal Reserve?
A)Accepting lower quality assets as collateral for loans
B)Opening lending facilities to noncommercial banks
C)Directly purchasing short-term bonds from money market mutual funds
D)Lowering the reserve requirement for banks

Question

Quizplus · Accepted Answer

Lowering the reserve requirement for banks is considered a conventional monetary policy tool, used to influence the amount of funds banks can lend by adjusting the amount of money banks must hold in reserve. Unconventional monetary policies typically involve measures taken during extraordinary economic circumstances, such as quantitative easing or the direct purchase of financial assets, which are not standard practices under normal economic conditions.

Which of the Following Would Not Fall Under the Description