Question

The federal reserve has a number of goals including low unemployment, price stability and sustainable economic growth. What does the fed use to reach these goals?

1) monetary policy tools
2) purchasing large amounts of gold
3) ongoing relationships with employment agencies
4) fiscal policy tools

Answer 1

The Federal Reserve uses monetary policy tools, such as adjusting interest rates and conducting open market operations, to reach its goals of low unemployment, price stability, and sustainable economic growth.

Step-by-step explanation:

The Federal Reserve uses monetary policy tools to reach its goals of low unemployment, price stability, and sustainable economic growth. Monetary policy involves policies that affect bank lending, interest rates, and financial capital markets. By adjusting these factors, the Federal Reserve can influence the overall health of the economy.

Some examples of monetary policy tools used by the Fed include adjusting the target federal funds rate, conducting open market operations to buy or sell government securities, and setting reserve requirements for banks.

On the other hand, purchasing large amounts of gold, ongoing relationships with employment agencies, and fiscal policy tools are not commonly used by the Federal Reserve to reach its goals.