The federal reserve influences the level of interest rates in the short run by changing the:

a. demand for money through open market operations.

b. demand for money through changes in reserve requirements.

c. supply of money through open market operations.

d. supply of money through changes in stock market operations

The correct answer is letter "C": supply of money through open market operations.

Explanation:

The United States Federal Reserve (Fed) facilitates a stable and growing economy by increasing the supply of money to spare growth and by shrinking the supply when inflation hits. Its three (3) main tools are manipulating reserve requirements, changing the discount rate, and open-market operations.

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.