Discount lending - Fed changes the rate at which it lends money
to commercial banks. In case of recession, rates are lowered buy
increased during expansion
Reserve requirements- The amount of deposit which a commercial
bank has to keep as liquid is called resrve requirement. It is
increased during expansion so that amount of lending decreases. But
it is decreased during depression.
Open market operation - it is the market where fed sells and
buys government bonds. It buys during recession to increase money
supply. It sells during expansion to decrease money supply
Term auction facility works like change in discount rate.