Prior to the 2007–2009 financial crisis, the most frequently employed monetary policy tool was

Question

Multiple Choice
raising the reserve ratio.
open-market operations.
raising the discount rate.
raising the prime interest rate.

Answer 1

Prior to the 2007–2009 financial crisis, the most frequently employed monetary policy tool was open-market operations. This tool allows central banks to buy and sell government securities to influence the money supply and interest rates in the economy.