The Fed tends not to use discount policy as its principal tool in influencing the money supply since
A) discount loans do not affect the money supply.
B) it does not have as much control over discount loans as it has on open market operations.
C) it is prohibited from doing so by an act of Congress.
D) it prefers to use reserve requirements.
B
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Because of free riders, a private, unregulated market would not produce the efficient quantity of a public good
Indicate whether the statement is true or false
The classical model predicts that, in the short-run, a tax cut financed by an increase in the money supply would
a. leave output and the price level unchanged. b. increase the price level but leave output unchanged. c. increase output but and reduce the price level. d. increase output and the price level by increasing aggregate demand. e. None of the above.
Economics is the study of
a. how to start a business b. how to make money in stocks, bonds, and real estate c. choice under conditions of abundance d. choice under conditions of scarcity e. multinational business
How does the Fed manage the federal funds rate?