Which of the following is the dominant means by which the Fed attempts to change the monetary base?
A)Discount loans
B)Open market operations
C)Changes in the required reserve ratio
D)Moral suasion

Question

Quizplus · Accepted Answer

Open market operations involve the buying and selling of government securities by the Fed, which directly affects the monetary base. This is the primary tool used by the Fed to manipulate the monetary base. Discount loans involve lending money to banks, but this does not directly affect the monetary base. Changes in the required reserve ratio and moral suasion can also influence the money supply, but these are not direct ways of changing the monetary base.

Which of the Following Is the Dominant Means by Which