the Federal Reserve raises the discount rate, the Federal Reserve is enactingA,tax reform.B.fiscal policy.C.monetary policy.D.a barrier to trade.2021Illuminate Education TM, Inc.

Discount rate is the interest rate charged by the central bank for the loans provided by it to the…

Answered: the Federal Reserve raises the discount…

Business

Economics

the Federal Reserve raises the discount rate, the Federal Reserve is enacting

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles

Section: Chapter Questions

Problem 5E

See similar textbooks

Related questions

Q: Why is the income elasticity of demand for money in precautionary motive, greater than the income…

A: In an economy , people make demand for money for different purposes such that transaction demand ,…

Q: The Federal Reserve publication that discusses forecasts for the economy is known as the

A: Federal Reserve(Fed) is the central banking system of the Country U. This reserve was established on…

Q: If interest rates increase in financial markets, then... Group of answer choices Eli’s trucking…

A: Interest rates in the proportion of the total amount that a borrower pays to the lender for…

Q: If a Central Bank decides it needs to decrease both the aggregate demand and the money supply, then…

A: Central bank can able to increase and decrease money supply with the help of various tools like…

Q: demand for money

A: Demand for money depicts when people demand more money to fulfil their needs and wants. It depends…

Q: The demand for money curve is drawn

A: Demand for money refers to the amount of money an individual wish to hold. Demand for money curve is…

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: By lowering the interest rate, the Fed makes it _______ costly for the banks to borrow monetary…

A: Answer: Correct option: A (less; falls) Explanation: If the Fed lowers the interest rate then the…

Q: Based on the impact of a drop in the discount rate on the supply of money in the market. select an…

A: Money supply: It is the total stock of money in circulation at a point in time and the money supply…

Q: The Federal Reserve’s decisions are approved by Congress and the President. Group of answer choices…

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

Q: When the central bank decides to increase the discount rate, the: interest rates decrease. interest…

A: Answer to the question is as follows :

Q: Which of the following is an example of a contractionary policy? A) Raising reserve ratio B)…

A: Contractionary policy refers to those policies that are reduces the money supply in the economy.

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: Banks follow the Fed’s lead to influence the economy and prevent a financial downturn? True or false

A: Fed is the supervisor of all the banks in the nation.

Q: Which of the following individuals is NOT associated with the school of Modern Monetary Theory?…

A: Modern Monetary Theory or Modern Money Theory (MMT) is a heterodox macroeconomic theory that depicts…

Q: If banks start paying higher interest rates on checking accounts, we would expect, assuming…

A: Since according to your question so next best option is given below

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: If bondholders expect the Fed to raise interest rates, what action might they take? How would this…

A: If there is an expectation of a rise in interest rates in future then holding bonds will become a…

Q: Again, please consider the following information, related to Economy Alpha. Economy Alpha contains…

A: Bank reserves are the cash essentials that monetary organizations should have close by to meet…

Q: The monetary policy video showed that the "monetarists" are opposed to using monetary policy as a…

A: An economic theory that focuses on the effects of the macroeconomic factors of the supply of money…

Q: Suppose you read a Wall Street Journal article that states the Federal Reserve will lower the…

A: Monetary policy: - it is a tool of government or central bank of a country in which they control…

Q: Why does the Federal Reserve (FED) raise the discount rate when the economy is strong?

A: Discount rate means interest rate.Raising or lowering nterest rate is part of the federal monetary…

Q: The framers of the Constitution gave the chief economic power of government to Group of answer…

A: Option A is incorrect as the president himself implements laws that are written by Congress.…

Q: Which of the following is an example of representative money? Group of answer choices Gold…

A: Representative money is money created by the government and backed by a physical asset such as…

Q: When the demand for money is greater than the supply of money: A) people offering to…

A: Money demand is the demand for cash balances by the individuals in the economy.Money supply is the…

Q: What is monetary policy?

A: Monetary policy is the policy adopted by the central bank of a country to control the money supply…

Q: What is monetary theory?

A: Economists examine the money supply and create strategies that revolve around it by regulating…

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: Calculate what the federal funds rate should be using the Taylor Rule

A: The Taylor rule (also known as Taylor's rule or Taylor principle) is an econometric model that…

Q: Assume the economy is characterized by rational expectations. If the Federal Reserve seeks to…

A: Considering the rational expectations of the consumers in the economy, when the federal reserve try…

Q: As part of the financial crisis )خطة إنقاذ الأزمة المالية( bailout plan in 2008, the Federal Reserve…

A: After the recession of 2008 in the United States, a law created the $700 billion Troubled Asset…

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: The discount rate is the interest rate that select one: a. banks charge one another for loans. b.…

A: When the commercial banks are short of money they borrow money from the federal bank, the federal…

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: At the time of the writing of the chapter titled, "The Federal Reserve," in the Naked Economics book…

A: Finally! Another release of the economic matters book that will not take care of you. In our…

Q: Federal Reserve ended all measures designed to change interest rates and instead allowed rates to be…

A: The federal reserve is a central banking system. It provides all services of the banking and…

Q: The fed controls the prime interest rate? True or False

A: Fed is the central bank of the Unites States of America. The functions of Fed includes: (i)…

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: What are the goals of monetary policy? Which goal is the most important or the principal goal?

A: Monetary policy is a type of economic policy that regulates the amount and rate at which an…

Q: What would be the consequences of eliminating monetary policy?

A: Monetary policy helps in adding money to the economy and that leads to lower interest rates. That…

Q: Deindustrialization is a process whereby... A. State laws override Federal laws B. Federal laws…

A: Deindustrialization refers to the process by which manufacturing falls in a region or society as a…

Q: A student who cashes a check at the student union in order to go shopping illustrates an example of…

A: In financial hypothesis, explicitly Keynesian financial aspects, speculative demand is one of 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…

Question

the Federal Reserve raises the discount rate, the Federal Reserve is enacting
A,
tax reform.
B.
fiscal policy.
C.
monetary policy.
D.
a barrier to trade.
2021
Illuminate Education TM, Inc.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 DISCOUNT RATE

VIEW

Step 2 ANSWER

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Use the given scenarios and the information you have learned about Fiscal and Monetary policy to complete the questions that follow The economy of Northhurst is currently experiencing GDP growth of over 7% with inflation rates of 4% and unemployment of 1% Jaelyn finds that everything she wants to buy costs m ore money, but her wages haven’t increased. She is worried about being able to afford everything she needs. The Federal Reserve notices this change in the economy and decide to take steps to correct it. They can use their 4 tools in the following ways: What will the Federal Reserve do to the interest on reserves? What impact will this have on loans from banks?
ASAP When the economy is in recession and the Fed wants to do expansionary policy, explain what all 4 types of policies they could undertake.
In an attempt to promote renewable energy, the government provides an annual rebate to those who install solar panels on their roofs. What type of economic policy would this represent? a) Fiscal policy b) Monetary policy c) Both fiscal policy and monetary policy d) Neither fiscal nor monetary policy Asap.
Directions:Use the given scenarios and the information you have learned about Fiscal and Monetary policy to complete the questions that follow The economy of Northhurst is currently experiencing GDP growth of over 7% with inflation rates of 4% and unemployment of 1% Jaelyn finds that everything she wants to buy costs m ore money, but her wages haven’t increased. She is worried about being able to afford everything she needs. The Federal Reserve notices this change in the economy and decide to take steps to correct it. They can use their 4 tools in the following ways: a. What will the Federal Reserve do to open market operations? b. What will the Federal Reserve do to the reserve requirement? c. What will the Federal Reserve do to the discount rate? d. What will the Federal Reserve do to the interest on reserves? e. What impact will this have on loans from banks?
If the U.S. Congress passes legislation to raise taxes to control inflation, what kind of policy is this? Group of answer choices A. Expansionary monetary policy B. Contractionary fiscal policy C. Contractionary monetary policy D. Expansionary fiscal policy
In an attempt to promote renewable energy, the government provides an annual rebate to those who install solar panels on their roofs. What type of economic policy would this represent? a) Fiscal policy b) Monetary policy c) Both fiscal policy and monetary policy d) Neither fiscal nor monetary policy
Only typed answer and don't use chat gpt The Federal Reserve's two objectives include: a. Price stability and maximum employment. b. Price stability and zero unemployment. c. Zero inflation and zero unemployment. d. Zero inflation and maximum employment.
1. Does the Fed target the nominal or real interest rate? 2. Does the FED care about the real interest rate? Should they? 3. Does the US currently rely more on fiscal policy or monetary policy to stabilize the economy? 4. Does fiscal policy have an expansionary bias?
The table above shows Econland’s economy aggregate demand and aggregate supply schedules. Econland’s potential GDP is $400 billion. (6). What specific fiscal policy would you prescribe to close the gap? (7). What specific monetary policy would you prescribe to close the gap?
_________________ implements fiscal policy and _______________ implements monetary policy (what answer correctly fills in these two blanks?) options: U.S. Supreme Court, U.S. Treasury U.S. Treasury, New York Federal Reserve Bank Donald Trump, Jerome Powell Congress and the President, Federal Reserve Open Market Committee
a. What are the fiscal policy tools the government can use to expand an economy that is in a recession? Explain the interaction between monetary and fiscal policy?b. Explain how monetary policy is expected to affect investment and aggregate expenditure and discuss its connection with interest rates and output?
After a series of measures to remedy the mortgage crisis that has beset the US economy, Ben Bernanke, chairman of the Board of Governors of the Federal Reserve and his colleagues are once again looking at cutting the central bank’s key interest rate as they hope that lowering the interest rates will give the economy a boost by encouraging investors and consumers to borrow and spend (Associated Press, n. pag.). The Fed is looking at slashing the interest rate by a full percent however, many economist believe that this is not the appropriate remedy for economic conundrum (Gavin, n. pag). According to many analysts, the issue of the economy regarding the mortgage is the lack of confidence by both the lender and the borrower. Even as the Fed resorts to drastic interest cuts, the first time the central bank has cut a full percentage point in one shot since 1982, this provides little help if lenders are not loaning money out of fear they will not be repaid and the borrowers…