macro quiz 15

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

Which best describes how the FOMC conducts monetary policy to increase employment during a recession to achieve its maximum employment objective?

- Lower the target range for the federal funds rate - simultaneously decrease the interest on reserve balances rate, overnight reverse repurchase agreement offering rate, and discount rate.

When the interest on reserve balances rate is lower than the federal funds rate, how will banks likely responds?

Banks will withdraw from their account at their Federal Reserve Bank and lend the funds in the federal funds market.

Which best describes how interest on reserve balances serves as a reservation rate?

Because interest on reserve balances is a risk-free option, banks should not be willing to lend their funds for less than they can earn on their reserve balances.

Which monetary policy implementation tool is the primary tool the Fed uses to steer the federal funds rate into the FOMC's target range?

Interest on reserve balances

Which best describes how the FOMC conducts monetary policy during an inflationary period to achieve its price stability objective?

It increases the target rate range for the federal funds rate.

Which monetary policy tool is a supplementary tool that sets a floor for the federal funds rate?

Overnight reverse repurchase agreement facility

What are the Fed's dual mandate goals?

Price stability and maximum employment

What role do open market operations play in monetary policy?

The Fed uses open market operations to ensure that the level of reserves remains ample.

Compared to fiscal policy, monetary policy has a much shorter

administrative lag

A contractionary monetary policy is designed to shift the

aggregate demand curve leftward.

Which of the following is a monetary policy intended to combat a recession?

decrease the federal funds target range to shift the aggregate demand curve rightward

Which monetary policy tool serves as a ceiling for the federal funds rate?

discount rate

Other things equal, a contractionary monetary policy during a period of demand pull inflation will

increase interest rates, reduce investment, and reduce aggregate demand

Which of the following is a tool of monetary policy?

overnight reverse repurchase agreement facility

The discount rate is the rate that banks pay for loans from

the fed

The interest rate that banks charge other banks for loans

the federal funds rate.

When the FOMC conducts monetary policy, it sets the target range for

the federal funds rate.

What is not one of the advantages of monetary policy over fiscal policy?

the lack of any timing lags


Kaugnay na mga set ng pag-aaral

Ch. 66 Care of pts with Urinary Problems

View Set

Acid Base, Blood gases and Electrolytes

View Set

KIN 2500: Chapter 17: Spinal Cord and Spinal Nerves

View Set

Molecular final just questions and fill in the blank and Molecular Biology last materials

View Set