What Are the Three Tools of the Federal Reserve? Explain

question 79

Essay

What are the three tools of the Federal Reserve? Explain how each can be used to increase the money supply.

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Definitions:

Profit Distribution

The process of allocating a company's profits among its shareholders, typically in the form of dividends.

Withdrawals

Withdrawals refer to the act of taking out cash or assets from a business by its owners for personal use, impacting the owner's equity.

Capital balances

The amount of money that partners or owners have invested in a business minus any withdrawals they have made from the business.

Profits

The financial gain obtained when revenues generated from business activities exceed the expenses, costs, and taxes needed to sustain those activities.