Currently United States Monetary is discretionary based, the Federal Reserve can do what ever they feel...

Currently United States Monetary is discretionary based, the Federal Reserve can do what ever they feel is best. The other option is a rules based system where the Fed would have to follow a fixed set of rules. Which do you prefer? Explain your position

Expert Solution

Rahul Sunny answered 2 years ago

Members of the Federal Reserve who decide and carry out monetary policy of the United States?...

Members of the Federal Reserve who decide and carry out monetary policy of the United States? Consists of the 7 Board of Governors (presently 2 vacancies), the President of the New York Fed bank and 4 Presidents from the remaining 11 Federal Reserve banks. (Hint – FOMC)

The Federal Reserve (the Fed) is the central bank of the United States with the power...

The Federal Reserve (the Fed) is the central bank of the United States with the power to create money. When the Fed decides to increase the money supply by creating more money, how do they go about doing this? What role do banks play in this process? Where does the money come from to pay for all their purchases?

1.The Federal Reserve is the central bank of the United States and is tasked with conducting...

1.The Federal Reserve is the central bank of the United States and is tasked with conducting monetary policy. a.What is the “dual mandate” of the Federal Reserve? b.Suppose the United States is currently experiencing high inflation and negative cyclical unemployment. Draw a graph of the AD‐AS model depicting current economic conditions. Then name three appropriate monetary policy actions c.Graph the effect of the policy actions in part b in the money market. What happens to the short‐term nominal interest rate?...

Complete both parts of this question. Both the Federal Reserve in the United States and the...

Complete both parts of this question. Both the Federal Reserve in the United States and the European Central Bank monitor growth in the money supply over time, but use nominal interest rates to implement monetary policy. Provide an example of a situation in which these two approaches to targeting require different central bank responses. Provide an example in which these two approaches are compatible.  [Hint: prices are sticky in the short run, so expected inflation and actual inflation may differ.]...

why do people favor the rules-based monetary policy, not discretionary policies

What do you think about the healthcare costs in the United States and do you feel...

What do you think about the healthcare costs in the United States and do you feel they are higher here?

At the end of 2008, the United States Federal Reserve and Treasury Department announced programs to...

At the end of 2008, the United States Federal Reserve and Treasury Department announced programs to purchase various assets, such as mortgage-backed securities or even commercial bills, from banks. Briefly explain how such actions will affect the money supply. (Please provide the definition of M1 and explain if the above action will directly affect M1.)

As the bankers’ bank, the Federal Reserve Banks operate the payments system in the United States?...

As the bankers’ bank, the Federal Reserve Banks operate the payments system in the United States? What are the different components of the payments system that they operate? Briefly describe.

The Federal Reserve and Monetary Policy" Visit the Federal Reserve website and answer the following questions...

The Federal Reserve and Monetary Policy" Visit the Federal Reserve website and answer the following questions in your own words. Part 1: What is the mission and legal mandate of the Federal Reserve System? What policy tools are available to the Fed to achieve its mission? What is the difference between an insolvent bank and an illiquid bank? Why/how does the Fed treat banks that are insolvent differently from illiquid banks? Part 2: The Fed has only increased the interest...

Monetary Policy: What works? Monetary policy by the US Federal Reserve is important for the US...

Monetary Policy: What works? Monetary policy by the US Federal Reserve is important for the US economy. However, economists disagree about several aspects of Federal Reserve decision-making powers including the composition of the Federal Reserve committees, Federal Reserve goals, and the actual impact Federal Reserve of policy on the economy. Should the Federal Reserve Board focus exclusively on the problem of inflation? What other goals are appropriate for Federal Reserve policy? What is the appropriate goal for the inflation rate?...

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