One of the Federal Reserve's most powerful tools is its influence over expectations,not its influence over the money supply.

Question

Quizplus · Accepted Answer

The Federal Reserve's influence over expectations is a crucial aspect of monetary policy. By signaling its intentions and influencing market expectations, the Fed can affect borrowing costs, inflation, and economic activity, even if it doesn't directly control the money supply. This is often referred to as the "Fed's communication policy" and it has become increasingly important in recent years.

One of the Federal Reserve's Most Powerful Tools Is Its