Question

Compared to the other tools the Fed uses to change the money supply the discount window is used_____open market operations and____the reserve requirement.

O more often than, more often than
O as often as, more often than
O more often than, as often as
O less often than, more often than

Answer 1

The discount window is used less often than open market operations and more often than reserve requirement changes by the Federal Reserve to influence money supply.

Step-by-step explanation:

Compared to the other tools the Federal Reserve uses to change the money supply, the discount window is used less often than open market operations, and more often than the reserve requirement. The Federal Reserve seldom uses discount loans and prefers that banks borrow from other available sources before using the discount window, as the Fed usually sets a higher discount rate compared to the federal funds rate. Furthermore, open market operations are deemed a more precise and powerful mechanism for executing monetary policy. Adjusting the reserve requirement is a less frequently employed method since it can have more significant implications for the amount of money available for banks to lend out.