The most flexible policy tool available to many of the world's central banks is:
A) The reserve requirement tool
B) The discount rate tool
C) The specific credit control tool
D) The open-market operations tool
E) The announcement effect tool

Question

Quizplus · Accepted Answer

The most flexible policy tool available to many of the world's central banks is the open-market operations tool. This is because it allows central banks to buy and sell government securities in the open market to control the supply of money in the banking system, which can be adjusted quickly and with precision to respond to changing economic conditions.

The Most Flexible Policy Tool Available to Many of the World's