Domain Tools

A. An increase in the reserve requirement will increase banks’ excess reserves and increase the money multiplier.
B. Changing reserve requirments is potentially the most powerful tool and is therefore the tool that is most used.
C. Changing the discount rate is the most powerful tool because banks are not that fond of borrowing from the Fed.
D> Open market operations refers to the Fed’s buying and selling of U.S. government securities and is the Fed’s most used tool.

I believe its D.

2 Responses

1. Huh? Says:
   October 30th, 2009 at 4:59 am

   I believe its D.
   References :

2. wolverine15 Says:
   October 30th, 2009 at 5:09 am

   well i dont know
   References :

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