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...
If the current exchange rate is higher than the Fed's target exchange rate, the Fed would O A. implement interest r...
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.
10. Al Fed purchases and sales of A corporate stocks and bonds are conducted at the...
10. Al Fed purchases and sales of A corporate stocks and bonds are conducted at the New York Fed's trading desk. B. government bonds are conducted at the New York Fed's trading desk. c real estate and other real assets are conducted by the Federal Open Market Committee D. All of the above are correct. E A and C, only 11. Under a fractional reserve banking system, A banks hold required reserves but generally lend out a majority of their...
When the Fed sells government securities to a bank, how are the Fed's assets affected? OA....
When the Fed sells government securities to a bank, how are the Fed's assets affected? OA. The amount of reserves held at the Fed decreases B. The amount of reserves held at the Fed increases C. The amount of the Fed's government securities increases D. The amount of the Fed's government securities decreases. Click to select your answer.
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...
If the Fed has an interest-rate target, why will an increase in the demand for reserves lead to a rise in the money supply? Use a graph of the market for reserves to explain.
If the Fed sells government bonds to the public, then reserves? a) increase and the...
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...
Which one of these policies should the Fed engage in if unemployment is 9% and inflation is 1.5%? Select one: a. Issue new government bonds and increase government borrowing b. Sell government bonds through an Open Market Operation c. Increase discretionary government spending d. Raise the Required Reserves Ratio e. Target a lower Federal Funds Rate
1) If the Fed wants to do easy money policy, it can a. increase reserve requirements...
1) If the Fed wants to do easy money policy, it can a. increase reserve requirements b. buy bonds from banks c. sell bonds in the open market d. raise the discount rate 2) The Lombard method: a. is a method for the Fed loaning reserves to banks b. is described accurately by all listed options c. put the rate on federal funds above the rate on discount loans d. has not been used since 2003
The Fed sells $4.9 billion in German government bonds, denominated in euros. What happens to the...
The Fed sells $4.9 billion in German government bonds, denominated in euros. What happens to the Fed's international reserves and the monetary base? Is this a sterilized or an unsterilized foreign exchange intervention? The Fed's international reserves (do not change / increase by $4.9 billion / decrease by $4.9 billion), and the monetary base (decreases by $4.9 billion / increases by $4.9 billion / does not change). This is (a sterilized / an unsterilized) intervention.
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.
10. Al Fed purchases and sales of A corporate stocks and bonds are conducted at the New York Fed's trading desk. B. government bonds are conducted at the New York Fed's trading desk. c real estate and other real assets are conducted by the Federal Open Market Committee D. All of the above are correct. E A and C, only 11. Under a fractional reserve banking system, A banks hold required reserves but generally lend out a majority of their...
When the Fed sells government securities to a bank, how are the Fed's assets affected? OA. The amount of reserves held at the Fed decreases B. The amount of reserves held at the Fed increases C. The amount of the Fed's government securities increases D. The amount of the Fed's government securities decreases. Click to select your answer.
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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