According to the Federal Reserves Federal Open Market Committee (2011) theFedera

According to the Federal Reserves Federal Open Market Committee (2011) theFederal Reserve controls the three tools of monetary policyopen market operations the discount rate and the reserve requirements.It goes on to say that using these three tools the Federal Reserve influences the demand for and supply of balances that depository institutions hold at the Federal Reserve Banks and in this way it alters the federal funds rate. The federal funds rate is the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions overnight.Discuss the impact if the Fed chose to raise or lower the federal funds rate as it relates to the chain of events that affect the following:Using your understanding of the financial system the demand for money banking and the money supply the stock market interest and spending interest and investment how money moves and how monetary policy affects aggregate supply and demand and inflation: