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

Question

Quizplus · Accepted Answer

The Federal Reserve (Fed) primarily uses monetary policy tools, such as changes in the federal funds rate, to achieve its macroeconomic goals. Government expenditures, 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