Macro Unit 3 Comic Book

Macro Unit 3 Comic Book

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  • What are the 3 tools of monetary policy?
  • The first tool of monetary policy is open market operations, which involved the buying and selling of government securities.
  • The second monetary policy tool is the discount rate. The discount rate is the interest rate charged by Federal Reserve Banks to depository institutions on short-term loans
  • The third tool of monetary policy is reserve requirements. Reserve requirements are the portions of deposits that banks must maintain either in their vaults or on deposit at a Federal Reserve Bank.
  • The federal reserve and FOMC use these tools to regulate and project the outcome of the economy
  • Thanks so much, random island animals! Now I understand the 3 tools of monetary policy.
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