Answer:
The least used monetary policy instrument used by the Fed is changing reserve requirement.
The four monetary policy instruments are:
Open market operations
Discount Rate
Reserve requirement
Interest on reserve
Open market operations is the most often used monetary policy instrument and least used is changing Reserve requirement. The Fed rarely changes reserve requirement.
What is the organizational structure of the Fed? How does the Fed influence monetary policy? How has the Fed revised its lending role in response to the credit crisis? How is monetary policy used in other countries?
Questions: a) Select a monetary policy instrument and explain how to use the instrument to implement monetary policy to ease the effects of a severe recession. b) Use the concept of the cause chain effect to indicate (e.g. rise, fall and or stay the same) how each of the following will be effected with this policy. i) Excess reserves il) Money Supply iii) Interes rates iv) Investment v) Aggregate demand vi) Real GDP
(a) Identify the three principal monetary policy tools (i.e., instruments) of the Fed and state how each can be used to increase the money supply. (b) Identify the Fed's policy tool that is most frequently used to conduct monetary policy and state two advantages in using this tool. (c) Briefly state the principal disadvantage in using each of the Fed's other monetary policy tools in conducting monetary policy.
When the Fed is easing monetary policy it is: A) lowering the fed funds target rate and buying bonds B) lowering the fed funds target rate and selling bonds C) increasing the fed funds target rate and buying bonds D) increasing the fed funds target rate and selling bonds
Monetary Policy attempts to manage the economy by targeting the Fed Funds interest rate and/or expanding the Fed’s balance sheet (BS). What are the main policy instruments the FED uses to expand its BS? Explain how each one would be used in practice to expand reserves.
1. Using the monetary policy tool the Fed employs most often, the Fed closes an inflationary gap. Describe the steps the economy goes through to move to the new equilibrium output and price level. Use graphs with your answer and be sure to label everything completely. 2.Explain and show on a graph the short-run and long-run equilibrium changes in the AD/AS model from expansionary monetary policy. How does this support an anti-monetary policy stance? 3. What is the equation of...
Name one monetary policy, and specify the policy tool to use, that the Fed could make to help boost the economy.
Which of the following is not an instrument of monetary policy? a. Reserve requirements b. Margin requirements on stocks c. Discount policy d. Open market operations
Which monetary policy tool does the Fed use most infrequently?
Name any two of the monetary policy tools that both ECB and the FED use?