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Why did the Fed abanon its traditional approach for setting the fed funds rate? (Select all that apply) 1. There was a stigma associated with discount lending from the Fed 2. There was a growing number of shadow banks that were not receiving the interest rate on reserves  3. Fed no longer wanted to pay the interest on reserves

Why did the Fed abanon its traditional approach for setting the fed funds rate? (Select all that apply) 1. There was a stigma associated with discount lending from the Fed 2. There was a growing number of shadow banks that were not receiving the interest rate on reserves  3. Fed no longer wanted to pay the interest on reserves

Brief Principles of Macroeconomics (MindTap Course List)
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter11: The Monetary System
Section: Chapter Questions
Problem 5CQQ
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Why did the Fed abanon its traditional approach for setting the fed funds rate? (Select all that apply)

1. There was a stigma associated with discount lending from the Fed

2. There was a growing number of shadow banks that were not receiving the interest rate on reserves 

3. Fed no longer wanted to pay the interest on reserves 

4. Fed's large scale asset purchases largely expanded the supply of reserves 

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