EBK ECONOMICS TODAY
18th Edition
ISBN: 9780133920116
Author: Miller
Publisher: YUZU
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Chapter 17, Problem cFCT
To determine
To show:
Political influence over FED's economic
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Students have asked these similar questions
In the video on "Fed Transparency", economist Diane Swonk maintains that greater Fed transparency will likely:
a.
Eliminate all ambiguity concerning Fed announcements
b.
Only lead to more confusion which will damage financial markets
c.
Allow the Fed chairman to express his own views while excluding the FOMC's consensus views
d.
None of these answers is correct
Compare the Fed's policy during Covid Recession (2020) to the policy during the Great Recession (2008-2009). How similar was the
Fed's approach to combat the Covid Recession to the Fed's policy during the Great Recession? (You can use the charts below and
compare data between these two periods)
Naked Economics: Undressing the Dismal Science Book by Charles Wheelan
Please refer to the chapter titled, "The Federal Reserve," in the Naked Economics book to answer this question. Which of the below statements DOES NOT CORRECTLY describe the immense power or policy choice of the Federal Reserve (the Fed), as explained in this chapter?
1) The Federal Reserve controls the money supply and therefore the credit tap for the economy.
2) The Fed can use monetary policy to counteract economic downturns, or prevent them from happening.
3) The Fed can inject money into the financial system after sudden shocks, such as the 1987 stock market crash or the terrorist attacks on Sept. 11, 2001.
4) When the Fed opens the credit tap and increases the money supply, interest rates rise and people buy less and borrow less.
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Similar questions
- Which kind of monetary policy would you expect in response to high inflation: expansionary or contractionary? Why?arrow_forwardArticle Summary In a September 2013 speech to the Independent Bankers Association of Texas, Federal Reserve Bank of Dallas president Richard Fisher stated that the Fed's credibility was harmed when it announced the previous week that it would continue its large bond purchasing program. In June, Fed Chairman Ben Bernanke had stated that that the program could begin to be cut back later in the year, and several other Fed officials expressed being open to the announced timing of this policy. Bernanke's change in his announced timeline of the Fed's intentions regarding the bond purchasing program brought criticism that the Fed had misled investors. In his speech, Fisher stated "I disagreed with the decision of the committee and argued against it. Doing nothing at this meeting would increase uncertainty about the future conduct of policy and call the credibility of our communications into question. I believe that is exactly what has occurred, though I take no…arrow_forward"Why do economists nearly uniformly support an independent Fed rather than one beholden directly to either the president or Congress?arrow_forward
- Outline the ways in which FED easing affects the yield curve (include the theories of the yield curve as part of this). Is it possible for an increase in the real money supply (FED easing) to have exactly the opposite effect? Explain the basis for why this is or is not possible.arrow_forwardWhich statement best describes the Federal Reserve's current level of transparency to the American public? The actions of the Fed are largely carried out in secrecy with little regard to public transparency. The Fed is somewhat transparent with regard to some aspects of monetary policy, but does not disclose details regarding macroeconomic conditions and goals. The Fed is extremely transparent with regard to monetary policy and discloses goals, targets, and predictions for the macroeconomy. The Fed only reports to the American public during periods of economic slow down.arrow_forwardWhy did the Fed switch from increasing Federal Reserve target rates from Dec 2015 to Dec 2018 to reducing interest rates in August 2019?arrow_forward
- QUESTION 3 Suppose the Fed's monetary policy follows the following Taylor rule: /= + 0.02 + B×y+Bx(n-0.02) where is inflation, y is the percentage deviation of output from its full-employment level and 8=0.71. According to the Taylor rule, if output is 2% above its full-employment level and inflation is 4%, the Fed should set the Fed funds rate to_%. (Submit your answer with up to two decimals and in percent terms, i.e., 10.22 for 10.22% and 11.44 for 11.442%.)arrow_forwardConsidering that the current unemployment rate is 3.9% (April 2024), what kind of policies should the Fed implement (expansionary or contractionary)? Explain. How do you compare your recommendation to the current Federal Reserve Bank policies?arrow_forwardPlease answer the following question:arrow_forward
- Thinking about T-accounts for the Federal Reserve System: If a bank finds it is short of reserves by $57 million toward the end of the day, how is the Fed balance sheet impacted if the bank borrows from the Fed to meet its minimum requirement? Asset category: $ change in asset category (in millions): Liability category: $ change in liability category (in millions):arrow_forwardNote: The answer should be typed.arrow_forwardWhich elements of the Fed's balance sheet are traditional, as opposed to the crisis-related innovations of the recent decades? choose all that apply Mortgage-backed securities Treasury securities (T-bills, notes) commercial bank deposits paper bank notes (with presidents on them) reverse reposarrow_forward
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