Question

What tools can the Fed use to expand or speed up the economy?

Answer 1

Answer:

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Explanation:

These are the reserve requirement, open market operations, the discount rate, and interest on excess reserves. These tools can either help expand or contract economic growth.

Answer 2

The primary tools that the Fed uses are interest rate setting and open market operations (OMO). The Fed can also change the mandated reserves requirements for commercial banks or rescue failing banks as lender of last resort, among other less common tools.