Question

Which of the following would not be considered a conventional monetary policy by the Fed:
(a) selling T-Bills
(b) purchasing Mortgage Bonds
(c) lowering the discount rate
(d) changing the reserve requirement

Answer 1

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting an inflation or interest rate to ensure price stability and general trust in the currency.
Purchasing mortgage bonds would not be considered a conventional monetary policy by the Fed, so the right answer is (b) purchasing Mortgage Bonds.