Problemas
6 The Federal Reserve implements monetary policy by using all EXCEPT which of the following tools? Establishing reserve requirements Setting the discount rate Buying and selling government security bonds Making loans
Roztwór
Rodolfo
veterano · Tutor durante 10 años
4.7
(165 Votos)
Respuesta
'Making loans'
Explicación
## Step 1The Federal Reserve, also known as the Fed, is the central banking system of the United States. It uses several tools to implement monetary policy, which is the process of managing the money supply and interest rates in the economy.## Step 2The first tool is establishing reserve requirements. This refers to the amount of funds that a bank must hold in reserve against specified deposit liabilities. By changing these requirements, the Fed can influence the amount of money that banks can lend, which in turn affects the money supply.## Step 3The second tool is setting the discount rate. This is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility. By changing the discount rate, the Fed can influence the cost of borrowing and thus the money supply.## Step 4The third tool is buying and selling government security bonds. This is done through open market operations, where the Fed buys and sells government securities in the open market. This can increase or decrease the amount of money in the banking system, depending on whether the Fed is buying or selling.## Step 5The fourth tool, making loans, is not a direct tool of monetary policy. While the Fed does provide loans to banks, this is typically done through the discount window, which is a tool for providing liquidity to banks in times of need. However, this is not a primary tool for implementing monetary policy.