Question

What are the three tools the Fed uses to keep the economy stable?

Answer 1

Step-by-step explanation:

The main function of Fed or Federal Reserve (established in 1913), is to manage the growth of bank reserves and money supply (for the stable expansion of the economy). The tools used by the Fed are as follows :

1. Opening the marketing operations.
2. The changes in discount rate can be done.
3. Changing the reserve ratio (ratio of percentage of reserves a bank is required to hold against deposits)