The Four Main Policy Tools the Federal Reserve System Uses

question 19

Multiple Choice

The four main policy tools the Federal Reserve System uses to influence the interest rate are setting

• A) the prime rate, open market operations, crisis management and setting the excess reserve ratio.
• B) quantitative easing, market interest rate and the discount rate, as well as open market operations.
• C) the discount rate, open market operations, crisis measures and setting the required reserve ratio.
• D) credit easing, the discount rate, setting tax rates, and setting the required reserve ratio.
• E) quantitative easing, open market operations, setting tax rates, and setting the required reserve ratio.

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Definitions:

Employee Responsibility

Obligations and duties that an employee is expected to fulfill as part of their role within an organization.

Payroll Items

Components that make up an employee's pay, including wages, salaries, bonuses, deductions, and taxes.

Employer Responsibility

The legal and ethical obligations that an employer has towards their employees, including providing a safe working environment, fair wages, and respecting labor laws.

Employee Responsibility

The duties and obligations employees have towards their employer and workplace.