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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.