If the interest is above the Fed's target, the Fed should a. Buy bonds to increase...
If the interest is above the Fed's target, the Fed should
a. Buy bonds to increase bank reserves
b. Buy bonds to decrease bank reserves
c. Sell bonds to increase bank reserves
d. Sell bonds to decrease bank reserves
Homework Answers
Answer
Fed needs to decrease interest rate and an interest rate decreases as the money supply increases so the Fed buys bonds to increase the money supply and that decreases the interest rate to the Fed's target level. It increases bank reserves.
A sell of bonds decreases the money supply
Option a
Add Answer to:
If the interest is above the Fed's target, the Fed should
a. Buy bonds to increase...
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If the current exchange rate is higher than the Fed's target exchange rate, the Fed would O A. implement interest rate parity. O B. buy dollars. O C. sell dollars. OD. implement purchasing power parity. Click to select your answer.
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TQuestion: 1 pt If the current exchange rate is higher than the Fed's target exchange rate,...
TQuestion: 1 pt If the current exchange rate is higher than the Fed's target exchange rate, the Fed would OA. implement interest rate parity. B. buy dollars. C. sell dollars. D. implement purchasing power parity. Click to select your answer.
Suppose the Fed wanted to engage in an expansionary monetary policy. Which of the following should...
Suppose the Fed wanted to engage in an expansionary monetary policy. Which of the following should it do? a. Increase the reserve requirement ratio. b. Buy bonds on the open market. c. Sell bonds on the open market. d. Lower taxes. e. Increase the discount rate. The interest rate at which banks can borrow funds from the Fed is known as… a. the federal funds rate. b. the discount rate. c. the prime rate. d. the real interest rate. e....
If the Fed has an interest-rate target, why will an increase in the demand for reserves...
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If the Fed sells government bonds to the public, then reserves? a) increase and the money supply increases. b) increase and the money supply decreases. c) decrease and the money supply increases. d) decrease and the money supply decreases.
Which one of these policies should the Fed engage in if unemployment is 9% and inflation...
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The Fed sells $4.9 billion in German government bonds, denominated in euros. What happens to the...
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If the current exchange rate is higher than the Fed's target exchange rate, the Fed would O A. implement interest rate parity. O B. buy dollars. O C. sell dollars. OD. implement purchasing power parity. Click to select your answer.
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TQuestion: 1 pt If the current exchange rate is higher than the Fed's target exchange rate, the Fed would OA. implement interest rate parity. B. buy dollars. C. sell dollars. D. implement purchasing power parity. Click to select your answer.
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