A mission of the Federal Reserve is to promote a combination of low interest rates and low unemployment. Why can it be difficult to accomplish both of these at the same time?

Q: One of the missions of the Federal Reserve is to strive for low interest rates and low unemployment.…

A: Fiscal policy influences the Quantity of aggregate demand through changes in government spending and…

Q: If the central bank’s goal is to maximize output, what interest rate will we expect in equilibrium?

A: The equilibrium real interest rate is the real rate of return which must be maintained to keep the…

Q: On March 26, 2020, the Federal Reserve abolished reserve requirements (the required reserve ratio =…

A: Reserve requirements refer to the process of keeping aside a fixed percentage of deposits as…

Q: If the Federal Reserve decreased reserve requirements, then it is likely trying to accomplish which…

A: Reserve requirement is the amount of money that the central bank bound the commercial banks to hold…

Q: why should monetary policy be used ?

A: All central banks have three tools of monetary policy in common. First, all of them use open market…

Q: If the economy is able to self-correct from a negative GDP gap, why might the Fed wish to intervene…

A: A self-correcting economy refers to one that has the ability to stabilize the market without…

Q: If the Federal Reserve lowered the prime interest rate, the money supply would increase? True or…

A: Prime Rate is rate of interest banks charge on short-term loans to their best customers. As the…

Q: Naked Economics: Undressing the Dismal Science Book by Charles Wheelan   Please refer to the chapter…

A: Money is anything that is generally accepted by the general public and it performs various functions…

Q: Which of the following is NOT an example of monetary policy       A. Lowering the discount rate…

A: Monetary policy is the policy which leads to change in the monetary component (interest rate) in the…

Q: Do this photo below represent the best  concepts of the monetary policy? Why?

A: The economics is a study of market and the various agents which comprises of the economy including…

Q: What are the Fed’s three objectives in conductingmonetary policy?

A: The Federal Reserve, as the country's monetary policy authority, affects the cost and availability…

Q: Why is a flatter Philips curve good news for monetary policy authorities? Draw the Philips curve,…

A: The Philips Curve is a graph that depicts the relationship between inflation and unemployment.

Q: When the Fed wants to reduce the supply of money circulating in the country, it will sell…

A: Open Market Operations is a tool used by Fed to regulate money supply in the economy. Fed can buy or…

Q: Explain why this following statement is true or false?. a) Discount rate is one of the monetary…

A: The discount rate is a monetary policy tool set up by the Central banks on the loans which are given…

Q: How does the Federal reserve Bank "influence" interest rates to meet the objectives of the Fed?

A: The first tool that is used by the Fed to meet the objectives is to manipulate short-term interest…

Q: If the Federal reserve decides to reduce the money supply through open market operations, then the…

A: If the Federal reserve decides to reduce the money supply through open market operations, it will do…

Q: describe the actions the Federal Reserve took to maintain a healthy economy during the recent…

A: Fed has done so much to prevent the economy from slowing down during the economic crises as an…

Q: The Federal Reserve is controlled by the government and not a committee? True or False

A: The Federal Reserve is the central bank set up in the United States of America to provide a safe…

Q: Why might a central bank choose to monetize the debt,knowing that it could lead to higher inflation?

A: Debt monetizing refers to the sponsoring of government expenditures by the monetary authority of the…

Q: s rate, what effects do you think those moves had on investment spending in the economy? Explain…

A: Federal interest rate is the interest rate charged by banks on lending of amounts to other…

Q: Which of the following policies by the Federal Reserve is likely to decrease the money supply? A.…

A: The Federal reserve often uses Monetary policy measures in order to control (Decrease/Increase) the…

Q: To what extent is the Federal Reserve independent of political pressures? Is this independence…

A: The Federal Reserve refers to the central bank of the United States. The Federal reserve was made…

Q: What will happen to the short run and long run prices when the Federal reserve decreases the…

A: The macroeconomic equilbrium in an economy is determined by the aggregate demand and aggregate…

Q: Which of the following is NOT a function of the Fed? OPTIONS: Regulating the money supply Holding…

A: Federal Reserve is the central bank of United States of America. It is responsible for monetary…

Q: Over the last 10 years the Federal Reserve has substantially changed the way it operates. What is…

A: The Federal Reserve System System has changed through monetary policy. The Federal Reserve System…

Q: Which of the following are frequently mentioned goals of the Federal Reserve? Check all that apply.

A: The often currently mentioned goals of the Federal reserve area unit Price Stability Exchange rate…

Q: Following the Great Recession, the Federal Reserve adopted a restrictive reserve policy.   true…

A: Following the Great Recession, the Federal Reserve adopted a restrictive reserve policy. This…

Q: Which of the following is NOT a tool of monetary policy? Select one: a. Discount rate b. Reserve…

A: Monetary policy is used to change the money supply in the economy.

Q: Describe the functions of the federal reserve system. What is its number one function from a policy…

A: The federal reserve is the central bank of the United States (US). The central bank is the apex bank…

Q: The former chairman of the Federal​ Reserve, Alan​ Greenspan, used the term​ "irrational exuberance"…

A: If the economy grows too fast, asset bubbles form which might go bust and the economy may crash.…

Q: What are the goals of monetary policy? What are the monetary policy targets? Which target is…

A: What are the goals of monetary policy? The objectives of monetary policy are to advance most extreme…

Q: Why does the 'Zero Lower Bound' pose a problem for the Federal Reserve?

A: Zero lower Bound means that the federal reserve has already set interest rate too low (around…

Q: Which of the following is NOT a function of the Federal Reserve? Multiple Choice O Lender of Last…

A: When talking about the Federal Reserve, it is the Central banking authority in the United States.

Q: Why is it important for the members of the Board of Governors of the Federal Reserve to have longer…

A: The Federal Reserve in the U.S was created on 23rd December 1913. It is the central bank of the U.S.…

Q: As a governor of the Central Bank of Egypt, how could you use the THREE tools of monetary policy to…

A: Monetary policy refers to the tool which is used by central bank in order to increase or decrease…

Q: List three main tools available to the Fed to change money supply in the economy.     If the Fed…

A: Following are the three main tools available to the Fed to change the money supply in the economy:…

Q: What happens to the money supply if the Fed decreases the reserve requirement? Group of answer…

A: Factors which affect the money supply are: 1. Reserve requirements  2. Government Spending  3. Open…

Q: pick one of the four tools the Fed uses to conduct monetary policy and discuss how it causes a…

A: In an economy, any of the monetary tools can be used to influence the behavior of market…

Q: Suppose there is an increase in the oil price in the United States. Which of the monetary policies…

A: Federal reserve is the central bank of United States which is responsible of flow of money into the…

Q: Why did the Federal Reserve lower interest rates? What other measures can the Federal Reserve take…

A: Central bank lowers interest rate as a tool or mechanism to increase the economic activities in the…