Question

Monetary policy" refers to the Fed's:

a. Influence on taxes and spending to influence the economy
Ob. Supervision and regulation of member banks
c. Influence of the economy through the changing of the money supply
d. Payment services, such as clearing electronic payments

Answer 1

Monetary policy refers to the actions undertaken by the US central bank, often referred to as the Federal Reserve, to influence the availability and cost of money and credit. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy. The Federal Reserve controls three tools of monetary policy.

Step-by-step explanation:

The term "monetary policy" refers to the actions undertaken by the US central bank, often referred to as the Federal Reserve. Their goals are to influence the availability and cost of money and credit to help promote national economic goals. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy.

The Federal Reserve controls the three tools of monetary policy--

1. Open market operations: The buying and selling of government bonds by the Federal Reserve in order to increase or decrease the money supply.
2. Reserve requirements: The amount of money that banks are required to hold in reserve, which affects the amount of money that can be loaned out.
3. Discount rate: The interest rate at which banks can borrow money from the Federal Reserve.