Fed use its reserve requirement and discount rate power

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Reference no: EM131947448

The federal reserve has three major tools that it can use to control money supply growth and interest rates- reserve requirements, discount rate, open market operations. However, the fed relies exclusively on open market operations.

(A) Why doesn’t the fed use its reserve requirement and discount rate power?

(B) Why does the Fed reply so exclusively on open market operations?

Reference no: EM131947448

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