Which monetary policy tool does the Fed use most infrequently?
A) changing reserve requirements
B) changing the discount rate
C) open market operations
D) changing the Fed Funds rate

Question

Quizplus · Accepted Answer

The Fed uses changing reserve requirements the least frequently as it is a very drastic tool that can have significant impacts on the banking system and the overall economy. It is more common for the Fed to use open market operations, changing the discount rate, and changing the Fed Funds rate to adjust monetary policy.

Which Monetary Policy Tool Does the Fed Use Most Infrequently