Asked by Queen Nahnuh on Jul 15, 2024
Verified
The Federal Reserve CANNOT do which one of the following?
A) Change the tax rate on profits
B) Change the discount rate
C) Change the required reserve ratio
D) Change margin requirements
E) Buy securities on the open market
Change The Tax Rate
Altering the percentage at which income, property, or sales are taxed by a governmental entity.
Discount Rate
The interest rate charged to commercial banks and other financial institutions for the loans they take from a country's central bank or Federal Reserve.
- Gain an understanding of the responsibilities and actions of the Federal Reserve in managing the supply of money.
- Ascertain the utilities the Federal Reserve leverages for conducting monetary policy.
Verified Answer
CZ
Carrie ZhangJul 16, 2024
Final Answer :
A
Explanation :
The Federal Reserve is not involved in setting or changing tax rates, as that is the responsibility of the government and legislative branch. The Federal Reserve's primary tools for implementing monetary policy are open market operations, the discount rate, and reserve requirements. Additionally, it has the ability to change margin requirements for certain assets.
Learning Objectives
- Gain an understanding of the responsibilities and actions of the Federal Reserve in managing the supply of money.
- Ascertain the utilities the Federal Reserve leverages for conducting monetary policy.
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