The Most Used Monetary Policy Instrument Used by the Fed

question 159

Multiple Choice

The most used monetary policy instrument used by the Fed is

• A) open market operations.
• B) changing the discount rate.
• C) changing the reserve requirement.
• D) issuing securities.

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Definitions:

Demand Deposits

Money in bank accounts that can be withdrawn "on demand" without any advance notice.

Junk Bonds

High-yield bonds that carry a higher risk of default compared to investment-grade bonds, typically issued by companies with lower credit ratings.

Real Estate Loans

Loans specifically provided for purchasing property, including both residential and commercial properties.

Medium Of Exchange

Items sellers generally accept and buyers generally use to pay for a good or service; the primary job of money.