The Federal Reserve Has the Power to Directly Increase or Restrict

question 77

Multiple Choice

The Federal Reserve has the power to directly increase or restrict the amount of money available to consumers to spend or invest through:

• A) open-market operations, whereby the Fed buys and sells government securities.
• B) federal funds adjustment, which involves interest rates charged by one bank to another.
• C) adjustment of the reserve requirement, which is the amount of cash and securities that every bank must have available.
• D) the discount rate, which is the interest it charges on the loans it extends to member banks.