What are the main policy tools the federal reserve

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1. What are the main policy tools the Federal Reserve of the United States can use to control the money supply. Briefly describe each tool.

2. Which tool does the Federal Reserve tend to use most often? Why does it tend to use that tool rather than the other tools?

3. Concisely describe the role banks play in the money creation process given a fractional reserve system.

4. In light of recent trends, what can be done when the money created by the Federal Reserve tends to be used as excess reserves rather than for making loans?

Reference no: EM132263060

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