Saturday, September 12, 2009

selective credit controls used by the Fed

The discount rate, reserve requirements, and open-market operations are often called general credit controls because each has an impact on the whole financial system. There is another set of policy tools available to the Federal Reserve; however that is more selective in its impact, focusing upon particular sectors of the economy. Nevertheless, use of these selective tools does contribute toward the overall objectives of the Fed to minimize unemployment, stabilize prices, sustain economic growth, and protect the nation‘s international payments position.

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