Helicopter Money Primer: The possible next frontier in quantitative easing Central banks-the Fed, the Bank of Japan, the European Central bank, the People's Bank of China, and others-have bought trillions of dollars of bonds, The Fed alone has bought $4 trillion-worth. What are the Fed's policy tools and which policy tool did the Fed use to increase its assets to $4 trillion? The Fed's policy tools include O A. the required reserve ratio, discount rate, and government expenditure O B. extraordinary crisis measures, marginal tax rates, and the discount rate OC. open market operations, marginal tax rates, and government expenditure O D. the required reserve ratio, discount rate, and open market operations To increase its assets to $4 trillion, the Fed used O A. the discount rate O B. required reserve ratios O C. a printing press to print more currency O D. large-scale open market operations called quantitative easing

Helicopter Money Primer: The possible next frontier in quantitative easing Central banks-the Fed, the Bank of Japan, the European Central bank, the People's Bank of China, and others-have bought trillions of dollars of bonds, The Fed alone has bought $4 trillion-worth. What are the Fed's policy tools and which policy tool did the Fed use to increase its assets to $4 trillion? The Fed's policy tools include O A. the required reserve ratio, discount rate, and government expenditure O B. extraordinary crisis measures, marginal tax rates, and the discount rate OC. open market operations, marginal tax rates, and government expenditure O D. the required reserve ratio, discount rate, and open market operations To increase its assets to $4 trillion, the Fed used O A. the discount rate O B. required reserve ratios O C. a printing press to print more currency O D. large-scale open market operations called quantitative easing

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A 259.
What procedures can the Fed use to control the federalfunds rate? Why does control of this interest rate implythat the Fed will lose control of nonborrowed reserves?
Briefly, explain how money is created in a modern economy with fractional reserve banking?b. What are the Federal Reserve’s two main monetary policy goals? List the three traditional or conventionaltools of monetary policy – which is used most often?c. Outline how the Fed would respond to a recession in the U.S. As part of your answer show how Fed’s action,impact banks, the money market, and households and firms, ceteris paribus. Include the appropriate graph andequation.
Before October 2008, if the Fed were to increase the discount rate so that it was much higher than the federal funds rate, eventually reserves would have decreased and the money supply would have decreased. O reserves would have increased and the money supply would have increased. reserves would have decreased and the money supply would have increased. O reserves would have increased and the money supply would have decreased.
Which are tools in its monetary toolbox?
M10
Suppose that the Fed Reserve conducts sterilized foreign exchange intervention of purchasing $500 million of foreign assets. As a result, O O O O O monetary base increases by $500 million. the Fed's domestic asset holdings increase by $500 million. total liabilities on the Fed's balance sheet will be unaffected. total money supply increases by $500 million. total assets on the Fed's balance sheet increase by $500 million.
1.5 Why do banks create money? Do they create money to help the Federal Reserve control the money supply or is there a more basic reason? Ippos Is transfer on MI and M2? red resent SAVALDAVATY A 100 000 of curre urrency
Bank A:Reserves on hand $38,000Deposit in the Fed $30,000US government bonds $12,000Checking account balances $120,000Savings account balances $25,000Bank B:Reserves on hand $50,000US government bonds $7500Savings account balances $20,000Checking account balances $100,000 In addition, people in this economy hold $8800 in cash, and all banks have the same reserve requirements we've used all semester. Calculate the (economy-wide) currency ratio, carefully following all numeric instructions. Do not convert the ratio into percent. In other words, if you get k of 0.99, enter only 0.99 in the blank.
2. The Fed is the most independent of all U.S. government agencies. What is the maindifference between it and other government agencies that explains the Fed’s greaterindependence?
Which of the following is NOT true about discount rate and statutory reserve requirement? Both are monetary policy instruments. O an increase in either one of them will reduce the money supply. a reduce in either one of them will increase the amount of loans by the commercial banks. a change in discount rate is more effective in affecting the money supply than a change in statutory reserve requirement