If reserves are scarce, how would the federal funds rate change (increase or decrease) if the Fed: (a) sells mortgage-backed securities (b) decreases the (minimum) reserve requirements (c) conducts overnight repo operations (d) conducts overnight reverse repo operations.

Explain how a TIPS and a nonindexed Treasury security can be usedto estimate the inflation premium.

A fixed-income security is defined as. A) a debt obligation that pays a fixed rate of return for a one-year period of time. B) common or preferred stock that pays a fixed annual dividend C) a long-term debt obligation that pays scheduled fixed payments. D) long-term debt issued solely by a federal or state government E) any security originally issued as either debt or equity that pays a fixed, pre-se p et payment

If the Fed wants to decrease the money supply it will ______ Treasury securities in open market operations.   Question 12 options:   buy   sell

With open market operations, the federal reserve sets the interest rate it lends to banks.    Ture or false

A 151.

In order to reduce inflation, the Federal reserve may choose to sell Treasury bonds in open market operations. Yes O No

In the federal funds markets, financial institutions can borrow money from the Federal Reserve. True False   Assuming the STRIPS are held to maturity, their investors know the precise payouts they'll receive. True False

What is the role of the Federal Reserve with interest rates during a recession?