Part 1. What are the three new tools for managing the federal funds rate that the Fed has relied on in recent years? (Check all that apply.)

A. The Fed began selling term deposits to banks in order to impact the quantity of excess reserves they choose to hold.

B. The Fed began engaging in overnight reverse repurchase agreements by selling securities to financial firms overnight.

C. The Fed began forgiving outstanding discount loans to banks in order to improve profitability in the banking system.

D. The Fed began paying interest on bank reserves to better control the quantity of excess reserves banks hold.

Part 2. Which two of these tools are most important?

A. the term deposit facility and discount loan forgiveness

B. paying interest on bank reserves and the term deposit facility

C. paying interest on bank reserves and overnight reverse repos

D. discount loan forgiveness and overnight reverse repos