Purchase Solution

Monetary Policy: The Federal Reserve's 3 Tools

Not what you're looking for?

Ask Custom Question

How does the Fed implement monetary policy to manage the economy?

Purchase this Solution

Solution Summary

This solution details the three main policy tools that the Federal Reserve uses to implement monetary policy and manage the economy.

Solution Preview

The Federal Reserve uses three main monetary policy tools. All are designed to change the money supply.

1. Open market transactions

The Fed can put money into the economy by buying bonds, or remove money from the economy by selling bonds.

2. Changing the required reserve rate

By decreasing the percentage of assets ...

Purchase this Solution

Free BrainMass Quizzes
Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.