The most recently-introduced tool of monetary policy is the:
A) Open-market operation
B) Discount rate
C) Interest on reserves
D) Reserve ratio

Question

Quizplus · Accepted Answer

The interest on reserves is the most recently introduced tool of monetary policy. It was introduced by the Federal Reserve in 2008 as a way to pay banks interest on their excess reserves held at the Fed. This tool allows the Fed to control short-term interest rates more precisely by adjusting the interest rate paid on reserves.

The Most Recently-Introduced Tool of Monetary Policy Is The