video response

In this video i learned about what the fed can actually do to manipulate the money supply.
I learned about the tools of the feds. There is Expansionary (Easy money) and Contractionary (Tight money). The fed can change Reserve requirements, Discount rate, and they can buy or sell bonds and securities. Reserve requirement is the percentage of the banks total deposit that they must hold on as vault cash or a fed branch, for expansionary the fed would decrease required reserves and for contraction they would increase. The discount rate is the rate at which banks can borrow money from the FEDs, for expansionary they would decrease the discount rate and increase it for contractionary. Then we have the buying and selling of bonds and securities for expansionary they would buy bonds to increase money supply and sell for contractionary in order to reduce money supply. Do you feel like they go off topic too much? like omg.