The main tool that the federal reserve uses to conduct monetary policy is A. Dis

Question

The main tool that the federal reserve uses to conduct monetary policy is A. Discount policy B. open market operations C. Check clearing D. Acting as the lender of last resort E. Setting reserve requirements The main tool that the federal reserve uses to conduct monetary policy is A. Discount policy B. open market operations C. Check clearing D. Acting as the lender of last resort E. Setting reserve requirements A. Discount policy B. open market operations C. Check clearing D. Acting as the lender of last resort E. Setting reserve requirements

Explanation / Answer

The main tool that the federal reserves uses to conduct monetary policy is open market operations and discount policy. The open market operations lets the federal reserves buy and sell assets in the world market. This increases the revenues and national wealth. The discount policy lets more number of investors to avail opporturnities to invest more. Banks provide loans on short term basis with relevant intrest rates.

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