Question

The Fed's tools of monetary control are
a. government expenditures, taxation, reserve requirements, and interest rates.
b. coin, currency, demand deposits, and commodity money.
c. open-market operations, lending to banks, reserve requirements, and paying interest on reserves.
d. fiat, commodity, and deposit money.
e. the money supply, government purchases, and taxation.

Answer 1

The correct answer is:

**c. open-market operations, lending to banks, reserve requirements, and paying interest on reserves.**

These are the primary tools used by the Federal Reserve (the Fed) to control monetary policy and influence the economy.