The three main tools of monetary policy are

Question

Multiple Choice
interest on reserve balances, open-market operations, and changing the federal funds rate.
tax-rate changes, changes in government expenditures, and open-market operations.
open-market operations, forward guidance, and changing the administered interest rates.
changes in government expenditures, changing the discount rate, and forward guidance.

Answer 1

The correct answer is:

open-market operations, forward guidance, and changing the administered interest rates.

These are the key tools used by central banks, like the Federal Reserve, to implement monetary policy. Open-market operations involve the buying and selling of government securities, forward guidance refers to communicating the future path of monetary policy to influence economic expectations, and changing administered interest rates involves adjusting rates like the discount rate or interest on reserves.