Which of the Following Is False

question 83

Multiple Choice

Which of the following is false?

• A)​If the Fed wants to expand the money supply, it could lower the discount rate.
• B)​The discount rate is a relatively unimportant monetary policy tool, mainly because member banks do not rely heavily on the Fed for borrowed funds.
• C)​Changes in required reserve ratios are such a potent monetary policy tool that they are frequently used.
• D)​If the Federal Reserve wanted to induce monetary expansion, it could reduce reserve requirements, but it cannot force the banks to make loans, thereby creating new money.

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