Get How Does The Discount Rate Affect The Money Supply Background. Adjusting the discount rate is one of the primary tools by which the fed can control the money supply. Answer:the federal reserve raises the rate in order to encourage banks to lend less.explanation answer:
The interest rate is the percent of principal charged by the lender for the use of its money. Why increasing the money supply does not always cause inflation. There are four major things the fed can do to curb a recession:
4 reserve requirement discount rates open market operations monetary tools.
The three tools are open market operations, the purchase and sale of government securities; If the commodity is an important. How does this affect you? The hurl of a new brand ensures that the revenue trend of business does not drop down.