Describe two tools the Fed can use to affect the money supply,
other than open market...
Describe two tools the Fed can use to affect the money supply,
other than open market operations. Changes in required reserves and
changes in the discount rate.
Please answer step by step write very clearly if
Possible with computer.
What tools can the FED use to increase or decrease the
money supply. Describe it full. What effect does each tool have on
GDP inflation and employment. For example if the Fed increases
interest rates what might be the impact of that action on GDP,
Inflation and Employment?
Other things equal, an open market sale by the FED will:
a) Increase the money supply
b) Increase the interest rate
c) Decrease the interest rate
d) Decrease the discount rate
Which one of the following is a monetary policy tool available
to the FED?
a) Open Market operations
b) Reserve Requirements
c) Discount Rate
d) All of the above
The tools that the FED has in its disposal to conduct monetary
policy include:
a) The fed funds rate and...
If the Fed conducts open-market purchases, the money supply increases and aggregate demand shifts right. increases and aggregate demand shifts left. decreases and aggregate demand shifts right. decreases and aggregate demand shifts left.
- Describe the monetary policy tools the Fed can use to affect
the monetary base.
- Compare and contrast expansionary and contractionary monetary
policies.
When the Fed increases the money supply through open market
operations, it can take some time before the interest rate changes
and new investment happens.
• Is this an example of inside or outside lag?
• Why does doesn’t the monetary expansion change GDP instantly?
Provide an example relating to either the bank, the borrower, or
another party in the economy.
what are the three tools the central bank can use to change the
money supply? describe how the central bank can use each of these
tools to either increase or decrease the money supply.
The Fed increases money supply through open market purchase
assuming a positive money multiplier. Analyze how the interest rate
changes based on the liquidity preference framework in the
short-run when the price level and output do not change. Also,
analyze how money velocity changes in the short-run by the quantity
theory of money.
When the Fed wants to contract the money supply through open
market operations, what would it do with the government bonds and
what would happen to the reserves the Fed or the member banks
hold?
The Fed has several tools they can use
to exercise their monetary policies. Describe two ways the Fed can
do to exercise a tight money policy! Describe the kind of economic
situation in which such a tight money policy would be appropriate
for the economy! Explain why!