The Fed's Mostly Used Tool for Changing the Size of the Money

question 278

Multiple Choice

The Fed's mostly used tool for changing the size of the money supply is

• A)its power to change the discount rate.
• B)its power to change legal minimum reserve requirements.
• C)open market operations.
• D)changing the size of the government budget deficit.

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Definitions:

Alessandro Volta

An Italian physicist known for inventing the battery in the 1800s, leading to the development of the first source of continuous electrical current.

Electricity

A form of energy resulting from the existence of charged particles, such as electrons or protons, either statically as an accumulation of charge or dynamically as a current.

Voltaic Cell

A device that converts chemical energy into electric energy.

Acid

A substance that donates hydrogen ions (H+) to solutions and can accept a pair of valence electrons to form a bond.