The United States Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximum employment, stable prices, and moderate long-term interest rates. The Federal Reserve is responsible for developing the appropriate strategy and implementing specific actions to meet these goals. In this assignment, write a paper in response to the following questions:
What tools are used by the Federal Reserve to implement monetary policy?
Why does the Federal Reserve rarely use the discount rate to implement its monetary policy?
Which tool is most often used by the Federal Reserve? Why?
