This is “Monetary Policy Tools”, chapter 16 from the book Finance, Banking, and Money (v. 1.1). For details on it (including licensing), click here.
For more information on the source of this book, or why it is available for free, please see the project's home page. You can browse or download additional books there. To download a .zip file containing this book to use offline, simply click here.
Has this book helped you? Consider passing it on:
Creative Commons supports free culture from music to education. Their licenses helped make this book available to you.
DonorsChoose.org helps people like you help teachers fund their classroom projects, from art supplies to books to calculators.
Chapter 16 Monetary Policy Tools
Chapter Objectives
By the end of this chapter, students should be able to:
- List and assess the strengths and weaknesses of the three primary monetary policy tools that central banks have at their disposal.
- Describe the federal funds market and explain its importance.
- Explain how the Fed influences the equilibrium fed funds rate to move toward its target rate.
- Explain the purpose of the Fed’s discount window and other lending facilities.
- Compare and contrast the monetary policy tools of central banks worldwide to those of the Fed.