Which of the following is NOT one of the policy tools through which th

QUESTION

Which of the following is NOT one of the policy tools through which the Fed controls the money supply?

A) the reserve requirement
B) open-market operations
C) the discount rate
D) the consumer price index
E) the federal funds rate

ANSWER

Answer: D
Explanation: D) The Fed controls the money supply through three policy tools: the reserve requirement, open-market operations, and the discount rate. When the Fed uses open-market operations, it employs the federal funds rate.