The phrase that best completes the given diagram is the setting of discount rates and the requirements of reserves.
Option B is the correct answer.
What is a discount rate?
The discount rate is the rate of interest levied by the Federal Reserve on the borrowings taken by banks from them.
Federal Reserve has the power to set the monetary policy of the government. It comprises operations relating to open markets, discount rates, and reserve requirements. This power is given under the Federal Reserve Act passed in the year 1913.
Therefore, setting the rate of discount and reserve requirements is the best phrase that completes the given diagram.
Learn more about the Fed Reserve in the related link:
https://brainly.com/question/25717013
#SPJ2
