The Reason That the Fed Does Not Actively Use Discount

Multiple Choice

The reason that the Fed does not actively use discount rate policy to control the money supply is because the Fed

A) acts when a majority of member banks agree on policy and the banks rarely agree.
B) earns interest on discounting and cannot afford to lose the revenue.
C) does not know how banks will respond to discount rate changes.
D) has been directed by Congress to set the discount rate at a permanent level.