Which monetary policy tool does the Fed use most infrequently?
A)changing reserve requirements
B)changing the discount rate
C)open market operations
D)none of the above

Question

Quizplus · Accepted Answer

The Federal Reserve uses open market operations (buying and selling government securities) and changing the discount rate more frequently than changing reserve requirements. Reserve requirements are only changed occasionally and tend to have a larger impact on the banking system, so the Fed typically avoids making frequent adjustments to this policy tool.

Which Monetary Policy Tool Does the Fed Use Most Infrequently