The Fed funds rate is below the Fed's target. In response, the Fed _ bonds, which _ reserves and the money supply.

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123Lv3

9 Jul 2021

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Related questions

SELECT THE MOST RECENT STATEMENT WHAT ACTION DID THE FED TAKE WITH RESPECT TO THE TARGET FED FUNDS RATE?

A.WHAT CAN YOU INFER ABOUT THE FED'S GOALS IN MAKING THIS DECISION?

MONETARY POLICY AND THE ECONOMIC OUTLOOK

A. WHAT WAS THE FED TRYING TO DO WITH ITS MONETARY POLICY DURING THE PAST TWO YEARS?

B. WHAT WAS THE ECONOMIC BASIS FOR THE FED'S POLICY ACTIONS?

C. WHAT IMPACT DID THE POLICY ACTIONS HAVE ON THE FED FUNDS RATE?

D. WHAT WERE THE FED'S CONCERNS FOR ECONOMIC GROWTH, HIGH UNEMPLOYMENT, PRICE STABILITY , INTERNATIONAL BALANCE.

1. If the Fed increases the volume of discount loans, the effect is to increase the volume of reserves. (Points : 2.5)

True
False

2. Borrowings from the federal funds market do not increase total reserves; borrowings from the Fed's discount window do. (Points : 2.5)

True
False

chocolateskunk83

1. Those who advocate that the Fed target monetary aggregates, usually argue that the Fed should not alter its monetary targets in response to temporary changes in macroeconomic conditions, yet those who advocate interest rate targeting never recommend that the Fed maintain a constant federal funds rate target. Why not? (What's the potential danger of maintaining a rigid interest rate target?)

2. If excessively rapid growth in the money supply is associated with all inflationary episodes, why do central banks ever allow the money supply to increase so rapidly?