The tools at the disposal of the Fed for changing the quantity of money do NOT include
A) changing discount rates.
B) changing the required reserve ratio.
C) increasing the number of commercial banks.
D) open market operations.

Question

Quizplus · Accepted Answer

The number of commercial banks is not a tool at the disposal of the Fed for changing the quantity of money. The other choices are all tools available to the Fed. Changing discount rates and the required reserve ratio directly affect the amount of money banks have available to lend, while open market operations involve buying or selling government securities to affect the money supply.

The Tools at the Disposal of the Fed for Changing