Question

describe three (3) activities that the Federal Reserve Bank has recently engaged to address the economic effects of the Covid-19 pandemic. Describe the specific goal of each activity and the mechanism of how the activity works

Answer 1

Ans:-The coronavirus pandemic badly affected US ,  it became difficult for the government and health authority to containment of the pandemic and its spread. The federal reserve has come forward with many stimulus actions to control its spared and to overcome the economic damages from the pandemic including

1.Repurchase agreement operations expanded-The federal reserve has immensely expanded the scop of its repo operations to pipe cash to money market.The aim of this process is to easily offering a limitless amount of money.

2.The fed give subsidiary loans to small and medium business:-The fedral banks main object is to lending money.The aim of giving subsidiary loan is to promote small and medium size business.During the pandemic period fed adopted three programs they are New loan facility,expanded loan facility and priority loan facility.

3.Bank directly lending money to major corporate employers:-This facility is known as PMCCF(primary market corporate credit facility).The PMCCF permit the federal reserve lend money directly to corporation by buying new bond issuance and providing loans.Debtors may differ the interest and principle payment for the next six month, the benefit of this scheme is that the employers have money to give employees and dealers.