How can the Federal Reserve influence the economy without waiting for government approval?

The Federal Reserve can influence the economy through various monetary policy tools, primarily by changing reserve requirements. This approach allows the Fed to directly control the amount of money that banks must hold in reserve, thus affecting how much they can lend out. When the Fed lowers reserve requirements, banks have more funds available to lend, which can stimulate economic growth by boosting consumer spending and business investment. Conversely, increasing reserve requirements can restrict lending and slow down the economy.

The other options involve actions that require government oversight or legislation. For instance, altering personal income tax rates typically requires acts of Congress and cannot be executed solely by the Federal Reserve. Changes in federal spending programs also depend on government approval and budgetary processes. Price controls are a form of direct governmental intervention in the economy and do not fall within the Federal Reserve's purview. Therefore, changing reserve requirements is the most direct and immediate method the Federal Reserve can use to influence the economy autonomously.