Which of the following is a tool the Fed uses to adjust the quantity of money?
I.The Fed can change the interest rate banks charge for loans to their prime customers.
Ii.The Fed can change the discount rate on loans to banks.
Iii.The Fed can buy or sell government securities.
A)i only
B)ii only
C)iii only
D)i and iii
E)ii and iii

Question

Quizplus · Accepted Answer

The Fed adjusts the quantity of money by changing the discount rate on loans to banks (ii) and by buying or selling government securities (iii).

Which of the Following Is a Tool the Fed Uses