Final answer:
The least effective Federal Reserve tool to affect the money supply is the discount rate, as changes to it have little impact on bank behavior, making open market operations a more effective tool.
Step-by-step explanation:
The least effective tool the Federal Reserve system has to affect the money supply is changes in the discount rate. In recent decades, the Federal Reserve has made relatively few discount loans because banks are encouraged to first borrow from other available sources, such as other banks, due to a typically higher discount rate compared to the federal funds rate. Therefore, most banks borrow little at the discount rate, rendering changes to it minimally effective in impacting their behavior. Unlike the discount rate, open market operations are found by the Fed to be more precise and powerful in executing monetary policy.