Social Studies

Patricia Villarreal

30 May, 16:09

The Federal Reserve can use four tools to achieve its monetary policy goals: the discount rate, reserve

requirements, open market operations, and interest on reserves. All four affect the amount of funds in the

banking system

Which of the following describes discount rate?

A

The interest rate Reserve Banks charge commercial banks for short-term loans.

B

The portions of deposits that banks must hold in cash, either in their vaults or on deposit at a

Reserve Bank

с

The Federal Reserve Bank of New York buying and selling U. S. government securities.

D

The newest and most frequently used tool given to the Federal Reserve by Congress after the

Financial Crisis of 2007-2009.