Which Is NOT a Major Tool Used by the Fed

question 205

Multiple Choice

Which is NOT a major tool used by the Fed to control the money supply?

• A) open market operations
• B) discount rate lending
• C) changing bank deposits
• D) paying interest on reserves

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Definitions:

Interest

A charge for borrowed money, generally a percentage of the amount lent.

Inflation Rate

The speed at which overall prices for goods and services increase, leading to a decrease in purchasing power.

Hourly Rate

The amount of money paid for one hour of work.

Equivalent

An item that holds the same worth, purpose, or significance as another within a given context.