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A: The three main tools of monetary policy used by the Federal Reserve are open-market operations, the discount rate and the reserve requirements. Through the use of these three tools, the Fed can manipulate market movements to exercise control over the economy.
Fiscal policy and monetary policy are the two tools used by the state to achieve its macroeconomic objectives. While for many countries the main objective of fiscal policy is to increase the aggregate output of the economy, the main objective of the monetary policies is to control the interest and inflation rates.hile for many countries the main objective of fiscal policy is to increase the aggregate output of the economy, the main objective of the monetary policies is to control the interest and inflation rates.