According to our review of the history of the Fed, during the Great Depression era, the Federal Reserve Bank did not inject any cash into the failing banking system nor did it save any of the banks that failed from 1929 to 1932. This "do nothing" monetary policy helped to make the Great Depression of the 1930's much worse. True or False True False

According to our review of the history of the Fed, during the Great Depression era, the Federal Reserve Bank did not inject any cash into the failing banking system nor did it save any of the banks that failed from 1929 to 1932. This "do nothing" monetary policy helped to make the Great Depression of the 1930's much worse. True or False True False

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Which of the following monetary tools is the Fed most likely to use for carrying out its day-to-day management of the money supply? Changes in the discount rate Changes in the reserve requirement Changes in tax rates Open market operations
Imagine that you are the leader of Bank of Canada's economic policy advisory board. Explain why expansionary and contractionary monetary policy strategies would be implemented.
Contrast the actions a central bank would take to increase the quantity of money in the economy with the actions it would take to produce the opposite effect
Discuss the structure and organization of the U.S. Federal Reserve
Describe two concepts of central bank independence. Is the Fed politically independent? Why do economists think central bank independence is important?
The Federal Reserve (also called the Fed) is the central bank of the United States. The Fed oversees the currency and money supply. The Fed system consists of five major parts: (1) the board of governors, (2) the Federal Open Market Committee, (3) 12 Federal Reserve banks, (4) three advisory councils, and (5) the 3,000 member banks in the system. The board of governors administers and supervises the 12 Federal Reserve banks. The 7 members of the board are appointed by the President of the United States and confirmed by the U.S. Senate. The Federal Open Market Committee has 12 voting members and is the policy-making body. The Federal Reserve is a private firm not supported by taxpayer dollars. The Fed buys and sells foreign currencies, regulates various types of credit, supervises banks, and collects data on the money supply and other economic activity. The Fed's actions directly affect everyone in terms of credit card rates, consumer prices, and student loan rates. The Fed uses three…
Explain the three basic tools of monetary policy that were available prior to the 2007-09 recession.
Following the Great Recession, the Federal Reserve adopted a restrictive reserve policy. true false
In this Decision Point activity you learned about how changes to monetary policy by the Federal Reserve should impact your own decisions and the decisions of everyone across the economy. Apply what you learned in this decision point to the following questions. One of the tools the Fed uses to influence interest rates is to pay banks interest on excess reserves they hold overnight with the Fed. You're a director at a bank. Your bank currently holds $185 million in excess reserves at the regional Fed and you're earning an annual rate of 2.42% on those excess reserves sitting at the Fed. The Fed decides to decrease the interest rate it pays on excess reserves from an annual rate of 2.42% to 1.55%. In response, you should the amount of excess reserves held at the Fed and make any given interest rate. loans at
Describe the functions of the federal reserve system. What is its number one function from a policy point of view?
The primary instrument of monetary policy for the Fed is the discount rate. True False
Decisions regarding purchases and sales of government securities by the Fed are made by the: Federal Deposit Insurance Commission (FDIC). Discount Committee (DC). Federal Open Market Committee (FOMC). Federal Funds Committee (FFC).