The Major Tools That the Fed Uses to Control the Money

question 51

Multiple Choice

The major tools that the Fed uses to control the money supply include I. controlling the amount of government spending. II. discount rate lending. III. open market operations.

• A) I and II only
• B) II and III only
• C) I and III only
• D) I, II, and III

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Definitions:

Economy

A framework for creating, distributing, and utilizing goods and services in a specific geographic region.

Economic Growth

A boost in the purchasing power adjusted market value of goods and services an economy creates over time.

Long Run

A period in economics sufficient for all markets to adjust, including production facilities and labor.

Capital

A resource, either financial or physical, that is employed with the aim of generating wealth through investment or production.