Economics

posted by .

I know the Fed uses four tools to influence/or control the money supply of the U.S.

1. Feds Fund rates
2. Open Market
3. Reserve requirements
4. Discount rate

Can someone please explain what they are and how the fed uses them. I have a test waiting for me after thanksgiving. I searched the net but I'm getting different ways of stating it, making it confusing. Thank you so much.

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Economics

    Effect on the money supply on two monetary policies: The Fed increased the discount rate The Fed decreases the required reserve ratio. Give me keywords that will shorten my research please. Thank you for using the Jiskha Homework Help …
  2. Economics

    In the Monetary policy transmission mechanism, explain what could go wrong between the following points 1. Change in the monetary policy and Change in the money supply 2. Change in the money supply and Change in the aggregate demand …
  3. Economics

    Hopefully you can help me and I need this ASAP. I need this by tomorrow in the morning. You answer the questions if it decreases increases, expands or not. Also, can you explain it too?
  4. macroecon

    Assume that there is equilibrium in both the goods and the money market at all times. Suppose that the president of the United States has decided to start a war. The government will have to increase spending to pay for weapons, equipments, …
  5. economics

    Assume that the reserve requirement is 20%. Also assume that banks do not hold excess reserves and there is no cash held by the public. The Federal Reserve decides that it wants to expand the money supply by $40 million. a. If the …
  6. Macroeconomics

    If it looks like a bank won't meet the Federal Reserve Bank's reserve requirement, normally it will first turn to the: A) other member banks and borrow at the federal funds rate. B) Fed and borrow at the discount rate. C) open market …
  7. Economic

    1.The most important tool the Fed has to control the money supply is a. changing the federal funds rate. b. changing the required reserve ration. c. open market operations. d. changing the discount rate 2. Banks use their excess reserves …
  8. economics

    Help me reword this?? The Fed is organized as a corporation, owned by its member banks, and directed by a government-appointed board. Monetary policy affects the size of the money supply and the level of interest rates. The first "tool"
  9. social studies

    What is the policy used most by the Fed to change the money supply?
  10. Economics

    1. Why is it difficult for the fed to prevent recessions by lowering interest rates A. The Fed can change the rate only once each year. B. It can take years for local banks to change their rates. C. The Fed's rate does not affect business …

More Similar Questions