module 12 (chapter 18)

Of the following, which would not be considered an unconventional monetary policy approach

Discount rate

Which of the following statements is most correct?

The Fed can control either the size of the monetary base or the price of its components

The research requirement does not meet all of the criteria of a good monetary policy tool, because it

cannot be quickly changed

The fed can __ in the economy

change both interest rates and the supply of money

recent research by fed researchers put the natural rate of interest at:

close to 0 percent

Given the following formula for the Taylor rule: Target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) +½(output gap) If the inflation rate in the economy were to fall by 2% below the target inflation rate, the target federal funds rate would:

decrease by 3.0%

The market for reserves derives from the fact that

desired reserves don't always equal actual reserves

When the fed wants to tighten monetary policy, the staff of the fed is likely to

increase IOER

Given the following formula for the Taylor rule: Target federal funds rate = natural rate of interest + current inflation + ½(inflation gap) +½(output gap) Every one percent increase in the rate of inflation will:

increase the target federal funds rate by 1.5% and increase the real federal funds rate by 0.5%.

The ECB now frequently uses _____ to inject reserves into the banking systems of countries that use the Euro.

repurchase agreements

Which of the following would be categorized as an unconventional monetary policy tool?

targeted asset purchases

The interest on excess reserves is

the upper bound of the federal funds target rate range