The Fed's Use of the Interest Rate It Pays Banks

Multiple Choice

The Fed's use of the interest rate it pays banks on their excess reserves

A) is a tool the Fed has used effectively over the past several decades to control the money supply.
B) is a tool that can be used to reduce the supply of money, but it cannot be used to expand it.
C) is a monetary tool that the Fed introduced in 2008.
D) is a tool that  could be used to expand the money supply, but it could not be used to reduce it.