Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 27, Problem 5MCQ
To determine
To identify:
The option that correctly identifies the tool that is not a part of the Fed's policy tools.
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1. The primary purpose of a central bank is to control a nation’s:___________. 2. The Fed’s largest single liability is the: _ asset not related to monetary ____________ .___________. 3. A Fed asset not related to monetary policy is ___________________________. 4. The Federal Reserve controls ___________________.1. The FOMC or _____________has __________ members. 2. The document by which the FOMC instructs the trading desk is called a ______________. 3. Among U.S. commercial banks, all __________banks are members of the Federal Reserve System while some ____________banks are members. 4. Total reserves equal required reserves plus _____________. 1. There are __________federal reserve banks. 2. Borrowing from the Fed is called “___________________ “. 3. A Fed asset not related to monetary policy is _________________________. 4. The document by which the FOMC instructs the trading desk is called a 1. Which of the following…
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
If the Fed opts to employ open market operations to increase the money supply, then
a.The Fed will have to compensate for this change by increasing the discount rate
b.Bond rates will increase because the Fed must buy Treasury bonds from individuals in the market, and this will cause the demand for these bonds to increase
c.Banks will petition the Fed to increase the federal funds rate to recoup their losses
d.Government budget surpluses will be more likely to achieve
e.Bank reserves will decrease as consumers withdraw funds to purchase more Treasury Bonds and this will have an effect on the money supply via the money multiplier
Chapter 27 Solutions
Foundations of Economics (8th Edition)
Ch. 27 - Prob. 1SPPACh. 27 - Prob. 2SPPACh. 27 - Prob. 3SPPACh. 27 - Prob. 4SPPACh. 27 - Prob. 5SPPACh. 27 - Prob. 6SPPACh. 27 - Prob. 7SPPACh. 27 - Prob. 8SPPACh. 27 - Prob. 9SPPACh. 27 - Prob. 10SPPA
Ch. 27 - Prob. 11SPPACh. 27 - Prob. 12SPPACh. 27 - Prob. 13SPPACh. 27 - Prob. 1IAPACh. 27 - Prob. 2IAPACh. 27 - Prob. 3IAPACh. 27 - Prob. 4IAPACh. 27 - Prob. 5IAPACh. 27 - Prob. 6IAPACh. 27 - Prob. 7IAPACh. 27 - Prob. 8IAPACh. 27 - Prob. 9IAPACh. 27 - Prob. 10IAPACh. 27 - Prob. 11IAPACh. 27 - Prob. 1MCQCh. 27 - Prob. 2MCQCh. 27 - Prob. 3MCQCh. 27 - Prob. 4MCQCh. 27 - Prob. 5MCQCh. 27 - Prob. 6MCQCh. 27 - Prob. 7MCQCh. 27 - Prob. 8MCQ
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