In 2008 the Fed reduced both the discount and federal fund rates dramatically.  But bank loan volume didn’t increase.  What considerations might have constrained the market’s response to Fed policy?

Q: Discuss the methods the Fed uses to enact monetary policy and provide an explanation of the effects…

A: Contractionary MP uses its tools to fight inflation. Inflation is a sign of the economy is…

Q: Why do Fed policies aim to keep the level of interest rates low in recent years? How have those…

A:

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: Suppose the reserve ratio is 10%. If the Fed wants to derease the money supply by $10 million, what…

A: Given  Reserve Ratio = 10% Reserve Ratio = 0.10 Decrease in money supply = $10 million

Q: 8. (3.9) Auditing the Fed? In recent years, several members of Congress have sponsored bills that…

A: One of the most critical functions of the United States Congress is oversight. Congressional…

Q: Describe the open market operation of the Fed.  What open market actions would the Fed take to…

A: Open market operation refers to the selling and buying of government bonds by the central bank. In…

Q: What did the Fed do in 2007 to deal with the underutilization) of the discount rate window

A: The 2007 financial crisis began in earlier years with economical credit and lending of tax standards…

Q: Suppose that the U.S. economy is at full employment when strong economic growth in Asia increases…

A: The US economy is said to be in full employment equilibrium in the initial place. This means that…

Q: Which is the interest rate at which banks borrow from the Federal Reserve? the federal funds rate…

A: Federal reserve, known as Fed, is the central bank of U.S. which controls the monetary  policy of…

Q: What would likely result of the Feds buying bonds be on both

A: The federal reserve operates the monetary policy. It affects the Money supply by buying and selling…

Q: If the federal funds rate were above the level the Federal Reserve had targeted, the Fed could move…

A: The federal funds interest rate is the amount that banks charge other banks for overnight loans of…

Q: Suppose the economy is in a boom in which real GDP is greater than potential GDP. T'he rate of…

A: If the real GDP increases the level of a potential GDP (meaning if the output gap is positive), it…

Q: stablishin

A: The Federal Reserve System is the United States of America's central system of banking.It was being…

Q: During & after the Great Recession, the Fed (under chairman Ben Bernanke) did little beyond using…

A: True.

Q: When the Fed buys bonds in open-market operations, it increases the money supply. If the Fed wants…

A: Note : Since you have uploaded multiple questions at a time , the first three shall be answered…

Q: Which of the following is true? When income tax rates fall, it is possible for tax revenues to rise.…

A: These Options are Wrong Because  1) Tax rate cuts influence incomes in two ways. Each tax rate slice…

Q: As a result of the recent global financial crisis, the Fed began implementing a new policy tool…

A: Federal Reserve purchases on federal agency debt and home loan security have reduced the cost of…

Q: "Why do economists nearly uniformly support an independent Fed rather than one beholden directly to…

A: The Federal Reserve — is the most remarkable monetary establishment in the US, maybe the world.

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: Which of the below statements DOES NOT CORRECTLY describe the immense power or policy choice of the…

A: In the US, the federal reserve is considered as the central bank and works as the bank for the…

Q: With respect to Open Market Operations, if the Fed buys bonds from the marketplace, then they are…

A: Open market operations refer to purchase and sale of  bonds by Fed.

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 is correct? Select all that apply. The Board of Governors sets the interest…

A: The board of governors sets the rules and regulations pertaining to reserves. The interest rate on…

Q: Describe two concepts of central bank independence. Is the Fed politically independent? Why do…

A: Goal independence and instrument independence are two types of central bank independence. In case of…

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: Suppose that inflation is 2 percent, the federal funds rate is 4 percent, and real GDP falls 2…

A: Following information is provided:Nominal fed fund rate (N) = 4% or 0.04Inflation rate (I) = 2% or…

Q: Under the channel-corridor system of monetary policy, if the effective federal funds rate is below…

A: If the effective federal funds rate is below the fed funds target range, then the fed can do open…

Q: Which of the following can be described accurately as “policy rates adjusted by the Fed?” (a)…

A: The policy rate adjusted by Fed refers to the adjustment in the interest rates by the Federal Open…

Q: To increase the money supply, the Fed could Select one: a. decrease the reserve requirement. b. None…

A: The central bank majorly follows two types of policies : contractionary and expansionary. In case of…

Q: When would it be most appropriate for the Fed to increase the money supply: during a recession or…

A: Recession is a phase of business cycle, when the economic activities slow down, GDP of the economy…

Q: Managing expectations of the Fed Funds rate in order to achieve lower long- term interest rates is…

A: Monetary Policy refers to the macroeconomic policies through which a country's central bank controls…

Q: Describe the Federal Reserve's monetary policy instruments and how they are used.

A: Various monetary policy instruments of Fed are 1. Required reserve ratio 2. Discount rate 3. Open…

Q: “The only way that the Fed can affect the level of borrowed reserves is by adjusting the discount…

A: The Fed can change or alter the discount rate in order to encourage or discourage banks to borrow…

Q: Ordinarily, banks try to keep excess reserves as low as possible because the Fed requires them to do…

A: Excess reserve is the amount of capital reserve held by the bank in excess of what is required by…

Q: In a period of deflation, the Fed would most likely A) decrease the required reserve ratio. C) All,…

A: General decline in prices of products typically related to a contraction within the supply of cash…

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: If there is a recession, the Fed would most likely encourage banks to provide loans by: a. buying…

A: Recession is described as the period in the economy in which the level of output falls. In such a…

Q: Can the Fed choose to target both the nonborrowed reserves and the federal funds rate at the same…

A: Non-borrowed reserves are the funds that a financial institution has of its own in cash without…

Q: The most effective tool of Monetary Policy at the Fed's disposal is Open Market Operations.   the…

A: The Monetary Policy helps to regulate the money supply which helps in economic growth.