If the Fed was concerned about the economy falling into recession, it might accommodate this development by stimulating the economy through: raising the interest rate paid on reserves. purchasing additional government securities. conduct open market sales. raise the interest rates that consumers and businesses pay when taking out loans.

If the Fed was concerned about the economy falling into recession, it might accommodate this development by stimulating the economy through: raising the interest rate paid on reserves. purchasing additional government securities. conduct open market sales. raise the interest rates that consumers and businesses pay when taking out loans.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter26: Monetary Policy

Section: Chapter Questions

Problem 1SQ

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Similar questions

As a "lender of last resort" the Fed :protects the deposits of $100,000 or less in all commercial banks in the country .bails out any depository institution it has decided should not be allowed to fail .bails out any corporation the government has decided should not fail .is obligated to bail out any depository institution in the country that is in financial difficulty
The fed is an independent voice for the government. True or false
The federal funds rate is the interest rate the Fed charges commercial banks. the interest rate a bank charges its best customers. the interest rate banks charge each other for overnight loans. the interest rate on a Treasury Bill.
Money supply decreases if the central bank reduces overnight policy rate. buys back government bonds. sells government bonds. encourages banks to give out loans.
At their last meeting, the Fed indicated that it would begin reducing its purchases of longer-term Treasuries and mortgage-backed securities. This is referred to as . Tapering. Tempering. Shirking. Slacking.
A decrease in money demand is likely to: Multiple Choice increase interest rates. decrease money supply. decrease Real GDP. increase nominal output.
The major problem facing the economy is high unemployment and weak economic growth. The inflation rate is low and stable. Therefore, the Federal Reserve decides to pursue a policy to increase the rate of economic growth. Which policy changes by the Fed would tend to offset each other in trying to achieve that objective? selling government securities and raising the discount rate selling government securities and raising the reserve ratio .buying government securities and raising the discount rate buying government securities and lowering the reserve ratio
Member banks of the Federal Reserve Systemn are immune from the effects of monetary policy. advise the Fed on monetary policy. vote on members of the Board of Governors. have little control over the system they "own."
Which of the following are reasons why the Fed targets an inflation rate greater than 0%? Inflation enables the labor market to function more smoothly. enables the Fed to more effectively fight recessions. helps avoid the risk of deflation. at 0% keeps the purchasing power of consumers stable.
Which of the following is correct? Select all that apply. The Board of Governors sets the interest rate on reserves. The federal funds market involves very short-term lending between banks. The current target for the fed funds rate is 0.0% to 0.25%. The interest rate on reserves (IOR) is 0.1%. The current discount rate at the Fed is 0.25%. The federal funds market involves lending between federal reserve banks.
The fed keeps an eye on the national economy. True or false
During times of rising inflation, the Fed will undertake monetary policy or "tight money policy."