Chapter 30, Problem 1P

To determine

a.

The recent target federal fund rate.

Introduction: The federal fund rate refers to the rate of interest at which the banks and other credit unions lend money or the reserve balances to various other depository institutions on an overnight basis without collateral requirement.

Financial fund rate is considered to an important tool in the financial market as it helps to transfer the reserves from the institutions with surplus to the ones who need it.

To determine

b.

The difference between the current and the previously decided federal funds rates.

Introduction: The federal fund rate refers to the rate of interest at which the banks and other credit unions lend money or the reserve balances to various other depository institutions on an overnight basis without collateral requirement.

Financial fund rate is considered to an important tool in the financial market as it helps to transfer the reserves from the institutions with surplus to the ones who need it.

To determine

c.

The current macroeconomic conditions in United States (US) and examine the discussion on the US economy.

Introduction: Macroeconomic condition refers to the huge set of factors which affect the complete structure in an economy. These factors include balances of Gross domestic product (GDP), inflation rates, employment or unemployment rate and prices prevailing in an economy.