On March 26, 2020, the Federal Reserve abolished reserve requirements (the required reserve ratio = 0%). What two major considerations led the Fed take such an unprecedented action

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

A: Answer: The federal reserve changes the supply of money to change the interest rate. This change in…

Q: The purchase and sale of government securities by the Fed is called  federal funds market open…

A: The central bank (Fed)  interferes in the market to change the money supply. The policies adopted by…

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: Why did the Fed switch from increasing Federal Reserve target rates from Dec 2015 to Dec 2018 to…

A: Fed increases the rates from Dec 2015 to Dec 2018 because of the excess liquidity in the market. The…

Q: If the Fed has decided to change the federal funds rate target, the main interest rate they use to…

A: The Federal Reserve System, also known as the Fed is the Central Bank of the United States. It…

Q: To what extent was the Fed being responsible for the housing price bubble of the early 2000s.

A: The housing price bubble of early 2000s further led to subprime crisis which was majorly responsible…

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 is the current reserve requirement set by the FED? What does this rate tell you about how the…

A: The reserve ratio required in the banks set by FED is 0% for transactions up to $16.3 million, 3%…

Q: Give two reasons that support the independence of the federal Reserve Bank and two reasons against…

A: The Federal Reserve is an independent central bank that works as a regulated authority, which…

Q: List three main tools available to the Fed to change money supply in the economy. Which tool do you…

A: Federal reserve system also known as Fed is the central bank of the USA managing and handling the…

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

A: True.

Q: Suppose that Second Republic Bank currently has $200,000 in demand deposits and $130,000 in…

A: Reserves = demand deposits - outstanding loans Required Reserves = demand deposits * Reserve…

Q: In early 2008 did the federal reserve hold more than 890 billion in assets

A: An extract of  financial statement of Federal Reserve:-

Q: Suppose banks desire to hold no excess reserves and that the Fed has set a reserve requirement of 10…

A: (Q) Suppose banks desire to hold no excess reserves and that the Fed has set a reserve requirement…

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: What are the three monetary policy tools that Fed has at its disposal?

A: Monetary policy refers to the central bank’s policy that brings changes in the supply of money by…

Q: from December 2015 through December 2018, , the Fed raised the target level for the federal funds…

A: A yield curve is also known as “term structures of interest rates” is a line graph which plots the…

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: 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: Fed Operation Describe the exact mechanism through which increasing reserve requirements affects…

A: Discount Rate: The discount rate is the rate at which banks take a loan from other banks (say…

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: Define the Federal Funds Rate. What is the current Federal Funds Rate? Define the Federal Reserve…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Members of the Board of Governors of the Fed are а. elected to two-year terms by the Electoral…

A: The members of the board of governer of the fed are appointed by the United State's President.

Q: Suppose a bank has $200 million in checking account deposits with no excess reserves and the…

A: Required reserves ratio is the proportion of deposits banks must hold as reserves.

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: 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: 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: Define the Federal Reserve Discount Rate. What is the current Federal Reserve Discount Rate?

A: Federal discount rate is interest rate initiated by central bank to control money…

Q: 23) Which of the following legislation says the Federal Reserve should promote price stability and…

A: According to the 1977 amendment to the Federal Reserve Act, the Federal Reserve should take care of…

Q: Explain the slopes of the supply and demand curves in the federal funds market.  Show and explain…

A: Federal fund rate: It is the interest rate at which banks and other depository institutions lend to…

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: In 2008 the Fed reduced both the discount and federal fund rates dramatically.  But bank loan volume…

A: A drop-in discount rate encourages banks to lower the rate of interest they charge on loans. Due to…

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: Which of the following is true about the Federal Reserve System? There are 12 regional Federal…

A: The Federal Reserve System (FRS) is the central bank of the United States. The Federal Reserve, also…

Q: Which of the following actions by the Fed would cause interest rates to fall?     A. Raising the…

A: The Fed can change the money supply by open market operations and by changing the reserve…

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: The fed controls reserve requirements. True or false

A: The Federal Reserve Bank or the Fed is the central bank of the United States of America. It is an…

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

A: The three main tools of changing the money supply in the economy by the central bank are as below:…

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.