Qualcomm - Milestone 3

Q (B) Which of the following statements about central bank objectives are​ true?   A. Central banks can have several​ objectives, but their actions need to provide a​ “nominal anchor” for the economy   B. All statements are true   C. A strict inflation target is a way to provide a​ “nominal anchor” for the economy   D. In​ principle, one of the goals of a central bank could be to slow down climate change

13.) What are derivative securities? Why do they exist? 14.) 2020 was year the COVID-19 global pandemic. Specifically explain how both monetary and fiscal policy have been used in the United States as a reaction to date. 15.) What causes the basic changes to overall supply and demand for money and loanable funds?

Apart from risk components, several macroeconomic factors-such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity-influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false: Statements When the Fed increases the money supply, short-term interest rates tend to decline. When the economy is weakening, the Fed is likely to increase short-term interest rates. During the credit crisis of 2008, investors around the world were fearful about the collapse of real estate markets, shaky stock markets, and illiquidity of several securities in the United States and several other nations. The demand for US Treasury bonds increased, which led to a rise in their price and a decline in their yields. When the economy is weakening, the Fed is likely to decrease short-term interest rates. True False

Suppose that the Reserve Bank "tightens" monetary policy.  In what order do events occur when this happens? Answer: First: ? Second: ? Third: ? Fourth: ? Select from (the pic attached)

D4

The Reserve Bank of Australia uses open market operations to manage monetary conditions. These operations allow the central bank to manage the overall supply of funds available in the money markets in order to keep the overnight cash rate consistent with the desired stance of monetary policy. Please select which of the following is/are considered open market operations: i. Repo based on nominated debt securities; ii. Direct purchase or selling of Commonwealth Government Securities; iii, Enter into FX market to conduct FX transactions; iv. Engage in high valued EFTPOS via NPP; v. Direct forbid transactions in the market Select one: O a. v only O b. ii only O c. i, ii, and iii O d. i, ii, iii, and iv Oe. All of the above

Describe tools that the US Treasury and the Federal Reserve use to undertake restrictive monetary policy today (versus before the mortgage-debt crisis).

H3. The Central Bank of the Bahamas pegs the Bahamian Dollar to the United States Dollar at a price of 1 BSD per USD. As an analyst for XYZ Consulting Inc., you have been asked to predict the behavior of key macroeconomic variables in the Bahamas for different policy scenarios. Using all the appropriate diagrams, your analysis must describe the Bahamian money and output markets, as well as the foreign exchange market. To perform this task, you must assume that prices are sticky: fixed in the short-run and flexible in the long-run. The scenarios are: a) A temporary restrictive monetary policy in the Bahamas. b) A temporary restrictive fiscal policy in the Bahamas.

What reforms to the financial system might reduce its exposure to systemic risk?

8. Macroeconomic factors that influence interest rate levels Apart from risk components, several macroeconomic factors—such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity—influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false:   Statements True False The larger the federal deficit, other things held constant, the higher are interest rates.       When the economy is weakening, the Fed is likely to increase short-term interest rates.       During recessions, short-term interest rates decline more sharply than long-term interest rates.       The Federal Reserve’s ability to use monetary policy to control economic activity in the United States is limited because US interest rates are highly dependent on interest rates in other parts of the world.

what are the tools the Federal Reserve uses to control monetary policies.  Expand on how the Federal Reserve System uses the interest rate to affect the money supply.

To assist with the economic recovery in the aftermath of 2008/2009 and 2020 recessions, the Federal Reserve engaged in Large Scale Asset Purchases. The Large Scale Asset Purchases    a included buying billions of US Treasury bonds   b included buying billions of Mortgage-Backed Securities   c is considered to be an unconventional tool of the Federal Reserve   d All of the above

To fight inflation, another monetary policy tool the Fed could use is to change the reserve requirement. With the reserve requirements, and as the result, the equilibrium federal goal of curbing inflation, the Fed should funds rate will A increase; drop OB. decrease; rise C. decrease; drop D, increase; rise

Should the economy’s current fragile recovery gather momentum, it is likely the Federal Reserve will decide to subtract liquidity from the economy.  How will it do that?     By selling U.S. Treasury bonds     By purchasing U.S. Treasury bonds     By having the U.S. Treasury purchase goods and services     By having the U.S. Treasury lower taxes     By having the U.S. Treasury raise taxes

If the Fed wants to decrease the money supply it will ______ Treasury securities in open market operations.   Question 12 options:   buy   sell

To assist with the economic recovery in the aftermath of 2008/2o09 and 2020 recessions, the Federal Reserve engaged in Large Scale Asset Purchases. The Large Scale Asset Purchases O included buying billions of US Treasury bonds included buying billions of Mortgage-Backed Securities is considered to be an unconventional tool of the Federal Reserve All of the above

Apart from risk components, several macroeconomic factors—such as Federal Reserve (the Fed) policy, federal budget deficit or surplus, international factors, and levels of business activity—influence interest rates. Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false: Statements True False Countries with strong balance sheets and declining budget deficits tend to have lower interest rates.       When the economy is weakening, the Fed is likely to increase short-term interest rates.       Long-term interest rates are not as sensitive to booms and recessions as are short-term interest rates.       The Federal Reserve Board has a significant influence over the level of economic activity, inflation, interest rates in the United States.

If reserves in the banking system increase by $1 billionbecause the Fed lends $1 billion to financial institutions,and checkable deposits increase by $9 billion, why isn’tthe banking system in equilibrium? What will continue tohappen in the banking system until equilibrium is reached?Show the T-account for the banking system in equilibrium.

One of the main arguments against using Fiscal Policy is the crowding out effect. Suppose the government uses government purchases to stimulate the economy.  a) Explain the crowding out effect in detail using a graph for the bond market, the money market, the foreign exchange market, and the AD SRAS LRAS model. b). Explain quantitative easing? c) If the Fed’s current policy is quantitative easing, do you think that there is a danger of the government’s current fiscal policy being crowded out? Why or Why not? Explanation required for credit.

To strengthen the dollar using sterilized intervention, the Fed would ____ dollars and simultaneously ____ Treasury securities. A. sell; sell B. sell; buy C. buy; sell D. buy; buy