Question

Which of the following is most frequently used when the Fed is attempting to adjust the money supply?

A. Moral suasion
B. Open market operations
C. Changing reserve requirements
D. all of the other answers are correct.
E. Changing the discount rate

Answer 1

Open market operations is the most frequently used tool by the Fed when adjusting the money supply.

Step-by-step explanation:

The most commonly used tool by the Fed when adjusting the money supply is open market operations. This involves buying and selling U.S. Treasury bonds to influence the quantity of bank reserves and interest rates. Through open market operations, the Fed can increase or decrease the money supply as needed.