How, in theory, does the Federal Reserve use elastic currency through its Open Market Operations?

Q: If the Fed sells $100 million of U.S. government securities, what happens to the quantity of money?

A: Open Market Operation:-  To keep the amount of money in circulation under control, the Federal Bank…

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: WHAT ARE CONVENTIONAL MONETARY POLICY TOOLS?

A: Answer: Monetary policy: Money policy refers to the policies of the central bank of a country to…

Q: What Is  the term Switching Policy?

A: Governments of countries often take measures to promote domestic production and consumption of…

Q: what does new keynsian says about money neutrality?

A: The New Keynesian theory believes that prices and wages are not flexible and therefore are sticky.…

Q: Explain why the interest rate channel of the transmission of monetary policy works better if there…

A: The interest rate channel is a monetary policy process in which a central bank's policy induced…

Q: What are the Fed’s three objectives in conductingmonetary policy?

A: The Federal Reserve, as the country's monetary policy authority, affects the cost and availability…

Q: what does post Keynesian says about money neutrality?

A: According to the theory of money neutrality, changes in the amount of money in an economy only have…

Q: List the three tools that the Federal Reserve could use to enact Monetary Policy.

A: Federal Reserve: It is central bank of the United States

Q: What does institutionalist say about money neutrality in economics?

A: A theory of economics known as the neutrality of money, or neutral money, contends that changes in…

Q: During the early months of the pandemic, the inflation rate fell well below the 2% target which…

A: Inflation refers to an increase in the general price level in an economy over the time. Inflation…

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: Why might a central bank choose to monetize the debt,knowing that it could lead to higher inflation?

A: Debt monetizing refers to the sponsoring of government expenditures by the monetary authority of the…

Q: Members of the Board of Governors of the Fed are а. elected to two-year terms by the Electoral…

A: The members of the board of governer of the fed are appointed by the United State's President.

Q: Why are bank accounts included in our definition of the money supply?

A: It is the total stock of money that is held by the people of a country at a particular time.

Q: To what extent is the Federal Reserve independent of political pressures? Is this independence…

A: The Federal Reserve refers to the central bank of the United States. The Federal reserve was made…

Q: What are the major functions of the Federal Reserve?

A: The banks are financial institutions which have the primarily function of the accepting deposits and…

Q: How should the Federal Reserve Bank execute Monetary Policy?

A: Monetary policy refers to the actions undertaken by a central bank, such as the Federal Reserve in…

Q: What is Liquidity Analysis?

A: Liquidity can be described as the degree by which security or asset can be sold or bought in the…

Q: What would be the consequences of eliminating monetary policy?

A: Monetary policy helps in adding money to the economy and that leads to lower interest rates. That…

Q: How can banks compute and quote a forward rate to their customers?

A: FORWARD RATE: An interest rate charged or applied on the financial transactions that are yet to take…