The most frequently used monetary policy tool is:
A) the discount rate.
B) open market operations.
C) the reserve requirement.
D) there is no preferred tool, all three are used equally by the Fed to control the money supply.

Question

Quizplus · Accepted Answer

Open market operations are the most frequently used monetary policy tool by central banks, including the Federal Reserve, to control the money supply and influence interest rates. This involves the buying and selling of government securities in the open market.

The Most Frequently Used Monetary Policy Tool Is