The most used monetary policy instrument used by the Fed is
A)open market operations
B)changing the discount rate
C)changing the reserve requirement
D)none of the above

Question

Quizplus · Accepted Answer

Open market operations are the most commonly used monetary policy instrument by the Federal Reserve. This involves buying or selling government securities in the open market to influence the level of reserves in the banking system and ultimately affect interest rates and the money supply. While the discount rate and reserve requirements can also be used, they are less frequently implemented by the Fed.

The Most Used Monetary Policy Instrument Used by the Fed