Before the US Federal Reserve introduced an interest rate on bank reserves held at the Fed, A....
Before the US Federal Reserve introduced an interest rate on bank reserves held at the Fed,
| A. |
the Fed fund rate could go very high. |
|
| B. |
the Fed fund rate could not reach the target. |
|
| C. |
the Fed fund rate could go very low. |
|
| D. |
the Fed fund rate could not fluctuate. |
Homework Answers
The correct answer is the option C. the Fed fund rate could go very low.
Before the interest was introduced, the Fed fund rate used to go very low. There was a downward spiral. That in a way, led to the situation where interest on reserves was introduced.
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Before the US Federal Reserve introduced an interest rate
on bank reserves held at the Fed,
A....
QUESTION 1 Commercial bank reserves held at a Federal Reserve Bank are a liability of the...
QUESTION 1 Commercial bank reserves held at a Federal Reserve Bank are a liability of the commercial bank and an asset of the Federal Reserve. True False QUESTION 2 During normal economic times, the Federal Reserve has primarily influenced overall financial conditions by adjusting the federal funds rate. The Fed Funds rate is the rate the U.S. Government charges banks for short term credit. True False QUESTION 3 Everything else held constant, a decrease in holdings of excess reserves will...
The Federal Reserve pays interest on the reserve deposits banks hold with the Fed. Explain if...
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8. Federal funds rate targeting Aa Aa In conducting monetary policy, the Federal Open Market Committee (FOMC) targets a Federal funds rate and the Federal Reserve Bank of New York uses open-marke...
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help plz How does the FED increase member bank reserves? Buying US Treasury Bonds Selling US...
help plz
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1. The interest rate in the federal funds market: a. is an interest rate that is...
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The required reserve ratio is the A. total amount of reserves the bank holds in its...
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Discount rate ( interest rate that banks pay to borrow reserves from the Federal Reserve) is...
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8. Federal funds rate targeting Aa Aa In conducting monetary policy, the Federal Open Market Committee (FOMC) targets a Federal funds rate and the Federal Reserve Bank of New York uses open-market operations to achieve and maintain the target rate. Suppose that the following graph shows the demand for Federal funds. Use the orange line (square symbols) to plot the supply of Federal funds (also called "the supply of excess reserves") when the FOMC targets a Federal funds rate of...
help plz
How does the FED increase member bank reserves? Buying US Treasury Bonds Selling US Treasury Bond Selling US Corporate Bonds The FED cannot increase member bank reserves Question 22 (5 points) Which country holds the most US Federal Government debt? China Japan Canada USA MacBook Air In the USA, which organization holds most of the US Federal Government debt? JP Morgan Chase The Department of Defense The Social Security Administration The Federal Reserve Question 24 (5 points) Why...
The required reserve ratio is the A. total amount of reserves the bank holds in its vaults. B. total amount of reserves the bank holds at the Fed. OC. amount of reserves banks are required by the Fed to be held as a percentage of the bank's loans. O D. amount of reserves banks are required by the Fed to be held as a percentage of the bank's deposits. O E. amount of excess reserves the bank holds just in...
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Suppose the Federal Reserve (Fed) decides the current money supply of $2.1 trillion is too low, and that an increase of $300 billion is necessary. What tool can the Fed use to accomplish this increase? Assume the current reserve ratio is 0.05. O Sell government securities Increase the reserve ratio. Increase the interest paid on bank reserves. Buy government securities. Calculate the change in reserves necessary to achieve the $300 billion increase. billion
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