Answer the following questions. List and describe the three primary functions of the Federal Reserve. What is the federal funds rate? What are open market operations?  Which open market operation would the Fed use to increase the money supply? What is the reserve requirement? What would happen to the reserve requirement if the Fed wanted to decrease the amount of money available for loans?

Q: Discuss the methods the Fed uses to enact monetary policy and provide an explanation of the effects…

A: Contractionary MP uses its tools to fight inflation. Inflation is a sign of the economy is…

Q: One of the missions of the Federal Reserve is to strive for low interest rates and low unemployment.…

A: Fiscal policy influences the Quantity of aggregate demand through changes in government spending and…

Q: Which of the following is true?     The width of the federal funds target range is 50 basis…

A: The current federal funds rate is 0.50 % - 0.25 %. There is 25 basis point difference between…

Q: Naked Economics: Undressing the Dismal Science Book by Charles Wheelan   Please refer to the chapter…

A: Answer: The federal reserve changes the supply of money to change the interest rate. This change in…

Q: Explain the effect of an increase in the reserve ratio, θ, on the high-power money demand and the…

A: Here we are given the situation of the money market. Where the money demand and the money supply…

Q: The Federal Reserve does not target both the money supply and an interest rate because it would be…

A: The Federal Reserve has many tools and policies to use  when their in instability in the economy in…

Q: Which of the follow are the main jobs of the Federal Reserve? (Check all that apply)     A. Conduct…

A: The Federal Reserve frequently alluded to as the Central bank or "the Federal Reserve," is the…

Q: Does the Fed have control over the federal funds rate and over bank reserves? If so, can the Fed…

A: The Fed funds rate is the interest rate U.S. banks charge each other to lend funds overnight.

Q: Which of the following is not true of the U.S. Federal Reserve System? The Fed has representation…

A: The Federal Reserve has the responsibility to manage the activities of commercial and financial…

Q: What are the three parts of the FED?   Federal Open Market Committee, District Banks,…

A: The Federal Reserve System (FED) is the central banking system of the United States. It was created…

Q: Describe the open market operation of the Fed.  What open market actions would the Fed take to…

A: Open market operation refers to the selling and buying of government bonds by the central bank. In…

Q: Assume that the required reserve ratio is 15%. If the Federal Reserve buys a $10,000 government bond…

A: The Federal Reserve can affect money supply in the economy through open market operations. This…

Q: The most flexible and most-often used tool of the Federal Reserve in controlling the supply of money…

A: Answer: C (open-market operations) Explanation: Open-market operation refers to the sale and…

Q: What is the current reserve requirement set by the FED? What does this rate tell you about how the…

A: The reserve ratio required in the banks set by FED is 0% for transactions up to $16.3 million, 3%…

Q: For each of the following definitions, select the correct term from the dropdown menu in the table.…

A: In banking with fractional reserves, the bank is only obligated to keep a portion of customer…

Q: Assume that banks lend out all their excess reserves. Currently, the total reserves that banks hold…

A: Answer: Given, Total reserves=$32.8 billion Reserve requirement (rr)= 8.2% or 0.082 New reserve…

Q: The discount rate is the interest rate the Fed charges on loans of reserves to banks. The federal…

A: Monetary policies are the policies that the central bank can use to draft, announce, and…

Q: List three main tools available to the Fed to change money supply in the economy. Which tool do you…

A: Federal reserve system also known as Fed is the central bank of the USA managing and handling the…

Q: Using the supply and demand analysis of the market for reserves, indicate what happens to the…

A: Reserve requirements:- The amount of cash that banks must have in their lockers or at the nearest…

Q: The discount rate is the interest rate the Fed charges on loans of reserves to banks. The federal…

A: In the federal reserve system, discount rate I the rate at which Fed lend money to commercial banks,…

Q: Use the following information to determine the Fed's balance sheet and calculate the Fed's Monetary…

A: Fed is the central bank of the United States. The balance sheet is the financial statement that…

Q: What are the two main mandates of the Federal Reserve Bank (Fed)? Why those two mandates are a…

A: Federal Reserve Bank give the nation a flexible and stable monetary and financial system  The…

Q: If the Fed has an interest-rate target, why will an increase in the demand for reserves lead to a…

A: Meaning of Money Supply: The term money supply refers to the situation under which there is an…

Q: What happens to the banks deposits and the money supply when fed decreases the reserve requirements?

A: When fed decreases the reserve requirements, banks will have to hold a lesser fraction of its…

Q: Political officials often call on the monetary authorities to expand the money supply more rapidly…

A: In short run, money is also like other commodity. The reason is, its increase in supply causes to…

Q: If the Fed wants to increase the money supply, it can a)raise income tax rates b) buy bonds in…

A: Money supply- It is the total stock of money circulated in an economy.

Q: Which of the following policy actions by the Central Bank is likely to increase the money supply?…

A: The central bank is the monetary institution that controls the money supply. The money supply is the…

Q: Let us pretend that you are the director of monetary affairs for the Fed and you just got authority…

A: “Since you have posted a question with multiple subparts, we will solve first three sub parts for…

Q: Central banks can increase or decrease the supply of money (M1) in three ways: open market…

A: Central bank is referred as the apex bank for managing the financial stability of the economy,…

Q: assume the reserve requirement is five percent. If the Fed sells 10 million worth of government…

A: Open market operation refers to the buying and selling of government securities by the federal…

Q: Describe the tools the central bank uses to control the money supply in the economy? Explain why the…

A: Monetary policy: - it is a tool of government or central bank of a country in which they control…

Q: Explain the functions of the Federal Reserve. Give examples.

A: The Federal Reserve System (FRS) is the nation's central bank. The Federal Reserve, or Fed, is in…

Q: How does an increase in the discount rate by the Federal Reserve affect the money supply and the…

A: The discount rate is the interest rate at which the central banks give loans to the commercial…

Q: List the names of the current chairperson of the Federal Reserve and members of the Board of…

A: Since there are multiple questions posted here, the first one only will be answered in this session.…

Q: The Federal Reserve uses three main tools to conduct monetary policy, which are open market…

A: Monetary policy refers to the policy followed by the central bank of the country under which is…

Q: Use graphs of the federal funds market to illustrate the effect on the demand for reserves or the…

A: In the realm of monetary policy, the Federal Reserve holds a pivotal role in shaping the financial…

Q: The Fed (US central bank) has reduced the required reserve ratio (RR) to zero percent effective on…

A: The money supply is the supply of currency in an economy. It means the money supply rises with the…

Q: Which of the following monetary tools is the Fed most likely to use for carrying out its day-to-day…

A: Monetary policy is the policy of the central bank to maintain stability in the inflation rate in the…

Q: In 2008, the Federal Reserve began paying interest on reserves held by banks. The interest rate they…

A: The reserve deposit ratio, also referred to as the cash reserve ratio, is the portion of deposits…

Q: This action by the Fed causes the money supply to by S billion. (Round your response to two decimal…

A: The formulae for the money multiplier(m) is: ∆M=∆R×1RR+ER Where  is the change in the supply of…

Q: Carefully explain how the Federal Reserve (Fed) will use each of the three monetary policy tools at…

A: The monetary authority of a country's policy is to manage either the interest rate charged on very…