1. What is the Federal Funds Rate, explain their existence? 2. What are the advantages of...

1. What is the Federal Funds Rate, explain their existence?

2. What are the advantages of putting money into a Money Market Account vs. putting the money in your bank account?

3. During the recession of 2008, The Federal Government spent more money than what was being brought in through taxes. To compensate for the difference, the government must borrow the difference. Which Money Market Instrument would you recommend the government purchase? How are they issued and what makes them such an attractive investment?

Solutions

Expert Solution

Here is solution of your question. If you have any query please comment in comment Box and will definitely resolve your query Thank you

jeff jeffy answered 4 months ago

Next > < Previous

Related Solutions

1) What is the federal funds rate? 2) How does the current 2.00-2.25% federal funds rate...

1) What is the federal funds rate? 2) How does the current 2.00-2.25% federal funds rate affect consumers today? 3) How does an increasing federal funds rate up to 2.5% by next year mean for the economy?

1. What is the relationship between the federal funds rate and Inflation? 2. if the graph...

1. What is the relationship between the federal funds rate and Inflation? 2. if the graph of federal rates is in recession, is the inflation graph in expansion? 3. How about vice versa? Please explain with definitions and examples from the US economy. This can be answered as a paragraph. Thank you.

What is the federal funds rate? Would you classify the federal funds rate as a policy...

What is the federal funds rate? Would you classify the federal funds rate as a policy instrument, and operating target, an intermediate target, or a policy goal? Explain.

Explain the concept of federal funds rate and explain how this rate impacts consumers

The Fed can change the discount rate directly and the federal funds rate indirectly. Explain. What...

The Fed can change the discount rate directly and the federal funds rate indirectly. Explain. What does it mean to say the Fed serves as the lender of last resort? The Fed has announced a new, lower target for the federal funds rate; in other words the Fed wants to lower the federal funds rate from its present level. What does setting a lower target for the federal funds rate have to do with open market operations? If reserves increase...

Explain/Discuss the following concepts: - The discount rate and the federal funds rate

what is the difference between the Libor rate and the federal funds rate?

Explain the Federal Open Market Committee’s choice to lower the Federal Funds Rate and how it...

Explain the Federal Open Market Committee’s choice to lower the Federal Funds Rate and how it impacts the economy. Describe how this action impacts bank reserves, how this changes the loanable funds market (be sure to mention interest rate and lending levels and use a supply and demand model if its helpful), and business and consumer borrowing and spending. You can assume that leakages are minimal.

Discuss the relationship between a federal funds target and a federal funds equilibrium rate. If the...

Discuss the relationship between a federal funds target and a federal funds equilibrium rate. If the target is greater than the equilibrium rate, what happens? If the target is below the equilibrium rate, what happens? Can the Fed set the federal funds rate (or any other interest rate) independent from market supply and demands for funds?

In 2001 the US Federal Funds Rate was only around 1-2%. If the negative shock had...

In 2001 the US Federal Funds Rate was only around 1-2%. If the negative shock had been larger, the economy might have hit the Zero Lower Bound. If this had happened, what alternative policy would you recommend and why?

Subjects