Question

Which monetary policy tool is a supplementary tool that sets a floor for the federal funds rate?

a. Open market operations
b. Interest on reserve balances
c. Overnight reverse repurchase agreement facility
d. Discount rate

Answer 1

[AI-generated answer — Bot GPT 3.5]

c. Overnight reverse repurchase agreement facility

Answer 2

[AI-generated answer — Step-by-Step Bot]

The monetary policy tool that sets a floor for the federal funds rate is the overnight reverse repurchase agreement facility.