In April 2022 theFederal Reserve boosted its target for the Federal funds rate for the first time in 14 years, increasing it from a 10-year low of .25% to 4.25%. What role did the Biden Administration have in this decision? A. None; the Fed is not accountable to the executive branch of government. B. Some; most but not all of the people who voted for this change are appointees of the Bush Administration. C. Considerable; if the Bush Administration were unhappy with the decision, it could force the resignation of those who voted in ways it did not like. D. Total; policy makers at the Fed serve at the pleasure of the President.

In April 2022 theFederal Reserve boosted its target for the Federal funds rate for the first time in 14 years, increasing it from a 10-year low of .25% to 4.25%. What role did the Biden Administration have in this decision? A. None; the Fed is not accountable to the executive branch of government. B. Some; most but not all of the people who voted for this change are appointees of the Bush Administration. C. Considerable; if the Bush Administration were unhappy with the decision, it could force the resignation of those who voted in ways it did not like. D. Total; policy makers at the Fed serve at the pleasure of the President.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter15: Macroeconomic Viewpoints: New Keynesian, Monetarist, And New Classical

Section: Chapter Questions

Problem 6E

See similar textbooks

Similar questions

1. If LRAS = $500 billion, RGDP = $700 billion, and MPC = .8, then what should the Fed do? Be specific and list all three options. Also draw and label both the current situation and what would occur as the government impacted the economy through their actions. 2. What are the impacts in the short run of the above actions on the following: the market interest rate, the quantity of money demanded, investment spending, aggregate demand, potential output, the price level, and equilibrium RGDP.
If the Fed decides to leave the federal funds rate target range unchanged, we would expect _______. A. deflation to occur and the unemployment rate to increase B. the recessionary gap to increase C. potential GDP to increase and the full-employment quantity of labor to increase D. inflation to increase and the unemployment rate to decrease
9. What are the two parts of the Fed's dual mandate? Answer the following with the dual mandate and bullseye chart in terms of signals to the Fed about the status of economy. The Fed's dual mandate, given to it by Congress in should be federal employment and stable prices. The bullseye chart was developed by the Federal Reserve Bank of Chicago. It is a visual comparison of the current state of the economy with the Fed's dual mandate. The chart shows the inflation rate on the ( horizontal, vertical ) axis and the unemployment rate on the ( horizontal, vertical ) axis and has crosshairs where the two targets meet. The southwest (lower left) and northeast (upper right) quadrants send conflicting messages about which monetary policy is appropriate. If the point showing the actual rates of unemployment and inflation lies (northwest, southeast, southwest, northeast ) of the center of the bullseye, the Fed will be in a policy predicament. The fact that the actual unemployment rate is below…
When economists speak of the "zero lower bound problem" that the Fed sometimes faces, what are they referring to? 1. It is when short term interest rates are close to zero meaning the Fed can no longer use changes in interest rates to stimulate the economy 2. It is when economic growth in the economy has reached zero percent and the Fed must use aggressive monetary policy 3. It is when the Fed has sold all the securities on its balance sheet and can no longer impact the money supply using open market operations 4. It is when banks choose to hold no excess reserves, making it impossible for the Fed to lower the discount rate
Using the following formula, how much would the Fed have had to reduce long-term interest rates to get the same stimulus as President Trump’s $200 billion increase in government spending? Bernanke’s policy guide: 1/4 point reduction in long-term interest rate = $50 billion fiscal stimulus
Which one of these policies should the Fed engage in if unemployment is very high and inflation is under control? Select one: a. Buy government bonds through an Open Market Operation b. Print more money and give it directly to tax payers c. Lower corporate and income taxes d. Raise the discount rate e. Lower consumer confidence
TRUE FALSE The more the Fed accommodates shocks to money demand, the larger the (government) spending multiplier.
Identify and explain in detail the three monetary policy tools that the Board of Governors could use to fix this recession and the two fiscal policy tools that the Federal Government could adopt to address the problem. Be specific in explaining what the tools are, how they work, what they are fixing, and how the actions of the Fed and Government will affect people's spending and saving habits, aggregate demand in the economy, and the amount of money in circulation.
14) During a period when economic growth is very strong and inflation rates are rising to uncomfortable levels, Federal Reserve policymakers might decide to pursue which type of monetary policy? 15) Which of the following pairs of terms is used to describe fluctuations in the economy? 16) During a contractionary phase of the business cycle which of the following most likely occurs? 17) Which of the following regulations prevent price gouging? 18) what does fiscal policy include?
The Federal Reserve wants to increase the money supply by increasing the lending potential of commercial banks by $320 billion. It plans to use open-market operations to accomplish this goal. The current reserve requirement for commercial banks is 5 percent. Instructions: Enter your answer as a whole number. a. Will the Fed want to buy or sell government securities if sales or purchases of government securities are the only instrument used in the open-market operations? The Fed will want t (Clicca total of $1 billion in government securities. ue-rather than permanently transferring the ownership of securities to achieve its goal? commercial banks. buy b. What other option cell The Fed could use some amount of (Click to select) to effectively (Click to select)
What short-run tradeoff does the Fed face when it tries to achieve its dual mandate? The Fed faces a tradeoff between A. the money growth rate and real GDP growth rate B. the inflation rate and unemployment rate C. keeping prices stable and moderating interest rates D. changing tax revenues and balancing the government’s budget
The Federal Reserve wants to increase the money supply by increasing the lending potential of commercial banks by $260 billion. It plans to use open-market operations to accomplish this goal. The current reserve requirement for commercial banks is 10 percent. Instructions: Enter your answer as a whole number. a. Will the Fed want to buy or sell government securities if sales or purchases of government securities are the only instrument used in the open-market operations? The Fed will want to (Click to select) va total $. billion in government securities. ....... b. What other option could the Fed pursue-rather than permanently transferring the ownership of securities-to achieve its goal? The Fed could use some amount of (Click to select) v to effectively (Click to select) v commercial banks