Which of the following are policy instruments available to the Fed as it tries to achieve its macroeconomic goals?
i. government expenditure on goods and services and taxes
ii. the government budget deficit or surplus
iii. changes in the federal funds rate
A) i and ii
B) iii only
C) i and iii
D) ii and iii
E) ii only

Question

Quizplus · Accepted Answer

The Federal Reserve (the Fed) primarily uses monetary policy tools, such as changes in the federal funds rate, to achieve its macroeconomic goals. Government expenditure, taxes, and budget deficits or surpluses are fiscal policy tools, not directly controlled by the Fed.

Which of the Following Are Policy Instruments Available to the Fed