MRU15.4

The Fed conducts reverse repurchase agreements with:

banks and financial institutions other than banks.

Why didn't the huge increase in the money supply that resulted from quantitative easing lead to increases in inflation?

because quantitative easing increased the monetary base, but not broader definitions of money like M1 and M2

In conducting quantitative easing, the Fed may decide to purchase mortgage securities to do all of the following EXCEPT:

influence average home prices.

Since 2008, excess reserves have increased from:

$2 billion to almost $3 trillion.

The tools of monetary policy:

continue to evolve as the economy changes.

An increase in the rate of interest paid on reserves would be an example of:

contractionary policy that increases the demand for reserves and raises short-term interest rates.

A reverse repurchase agreement will accomplish all of the following to banks and other financial intermediaries EXCEPT:

ensure their solvency.

Quantitative easing involves the Fed swapping:

money for assets other than T-bills.

During the Great Recession, the Fed relied on each of the following tools to influence the economy EXCEPT:

open market operations.

In a "reverse repurchase agreement," the Fed:

takes on reserves in exchange for T-Bills.