Which of the following is the most frequently used tool the Fed uses to control the supply of money?
A) the discount rate
B) the reserve requirements
C) open market operations
D) the 30-year home-mortgage interest rate

Question

Quizplus · Accepted Answer

Open market operations, which involve the buying and selling of government securities by the Fed, are the most frequently used tool to control the supply of money. Changes in the supply of money can impact inflation, employment, and economic growth. The discount rate and reserve requirements are also tools used by the Fed but are not used as frequently as open market operations. The 30-year home-mortgage interest rate is not a tool used by the Fed to control the supply of money.

Which of the Following Is the Most Frequently Used Tool