Question

Suppose the Fed is worried because business inventories are rising. Due to this concern, the FOMC will discuss the direction of monetary policy at its next meeting. In this circumstance, one action the Fed could take would be to would make banks | ?| cautions about making loans, and thus, banks would make | ?| loans. ?| the discount rate. The Fed's expectation is that this As a result, the money supply would ?I, and the nominal interest rate would As a result, Investment would employment is restored. V. Aggregate Demand would shiftand Real GDP would ?1 until full This action is referred to as monetary policy. Of the Fed's policy tools, changing the discount rate is O A. the most important and most frequently used tool. O B. the weakest and least frequently used tool. O C. the weakest tool. O D. the strongest and least frequently used tool.

Answer 1

The discount rate is the interest rate at which an eligible financial institution may borrow funds directly from a Federal Reserve bank.

Decrease, less, more.

Increase, fall.

Open market operations is the widely used tool and reserve requirements is the least used monetary tool.

Increase, right, increase

Expansionist

D. The strongest and least.

The