The range within which the federal funds rate can fluctuate is determined by a ceiling of the ______ and a floor of the ______. discount rate...IOER IOER....discount rate target federal funds rate...ioer ioer....target federal funds rate disount rate....target deferal funds rate
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The range within which the federal funds rate can fluctuate is determined by a ceiling of the ______ and a floor of the ______.
discount rate...IOER
IOER....discount rate
target federal funds rate...ioer
ioer....target federal funds rate
disount rate....target deferal funds rate
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- Expansionary policies are designed to stimulate the economy byincreasing aggregate output. Explain why expansionary fiscalpolicy and expansionary monetary policy have opposite effectson the interest rate despite having the same goal of increasingaggregate output. Illustrate your answer with graphs of themoney market.Explain and discuss contractionary fiscal policy and contractionary monetary policy with IS-LM graphs and explain its effects on consumption, aggregate demand, interest rate and prices.Explain the difference between fiscal policy and monetary policy. Explain also 2 advantages and 2 disadvantages of both policies.
- Explain The discount rate and the federal funds rate.When the inflation rate increases, what happens to thefederal funds rate? Operationally, how does the Fedadjust the federal funds rate?Using both the liquidity preference framework and thesupply and demand for bonds framework, show whyinterest rates are procyclical (rising when the economyis expanding and falling during recessions).
- 24)To reassure investors who were unwilling to buy mortgages in the secondary market, the U.S. Congress used two government-sponsored enterprises (GSEs) called, ________. The GSEs role was to sell bonds to investors and use the funds to purchase mortgages from _______. Select one: a. the Fed and the Treasury Department; Households b. the Fed and Treasury Department; Banks c. Fannie Mae and Freddie Mac; Households d. Fannie Mae and Freddie Mac; Banks e. Fannie Mae and Freddie Mac; Investment Banks“The Lucas critique by itself casts doubt on the abilityof discretionary stabilization policy to be beneficial.”Is this statement true, false, or uncertain? Explain youranswerTargeting the federal funds rate ( is, is not ) as important a tool today as it was before the 2007-2009 financial crisis. During the financial crisis when the federal funds rate was near zero, the Fed ( did, did not ) wish to go lower than zero and came up with alternatives to influence interest rates and lending: the administered rates. Today, the Fed still sets a target for the federal funds rate but finds it more effective to change the administered rates. By doing that, the Fed can stimulate or restrict lending. The federal funds rate is the Feds policy rate and (is, is not ) useful when providing forward guidance. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
- 10. Suppose that the equilibrium real federal funds rate is 2.5% and the target inflation rateis 2.5%. If the current inflation is 6.25% and the output gap is -2.3%, use the Taylorrule to find the federal funds rate that the Fed should choose. Show your work.Oman’s government will finance most of its budget shortfall in 2021 by borrowing to plug a fiscal gap battered by a decline in oil prices and the coronavirus pandemic. The Persian Gulf state is looking into borrowing that will cover 73%, or 1.6 billion rials ($4.2 billion), of the country’s 2.2 billion-rial shortfall, with the remaining 600 million rials to be drawn from its reserves, according to a post on Twitter by the state-run Oman News Agency on Friday. The government based its 2021 budget plan on an oil price of $45 per barrel. Other highlights from Oman’s 2021 budget: Expenditure is set to fall to 10.8 billion rials, a 14% drop from the previous year. 2021 revenue is set to fall to 8.6 billion rials, a 19% decline. Budget deficit at 8% of gross domestic product in 2021, 2.2 billion rials. Oman has taken measures such as reduced spending and plans to impose a 5% value-added tax in 2021. It will implement developmental projects valued at 371 million rials as part of the effort…Oman’s government will finance most of its budget shortfall in 2021 by borrowing to plug a fiscal gap battered by a decline in oil prices and the coronavirus pandemic. The Persian Gulf state is looking into borrowing that will cover 73%, or 1.6 billion rials ($4.2 billion), of the country’s 2.2 billion-rial shortfall, with the remaining 600 million rials to be drawn from its reserves, according to a post on Twitter by the state-run Oman News Agency on Friday. The government based its 2021 budget plan on an oil price of $45 per barrel. Other highlights from Oman’s 2021 budget: Expenditure is set to fall to 10.8 billion rials, a 14% drop from the previous year. 2021 revenue is set to fall to 8.6 billion rials, a 19% decline. Budget deficit at 8% of gross domestic product in 2021, 2.2 billion rials. Oman has taken measures such as reduced spending and plans to impose a 5% value-added tax in 2021. It will implement developmental projects valued at 371 million rials as part of the effort…