r meetings in 2008 at which the Fed changed the target for the federal funds rate are shown below. January 30, 2008 March 18, 2008 October 8, 2008 October 29, 2008 Pick one of these dates and find out why it chose to change its target f
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Four meetings in 2008 at which the Fed changed the target for the federal funds rate are shown below.
January 30, 2008 |
March 18, 2008 |
October 8, 2008 |
October 29, 2008 |
Pick one of these dates and find out why it chose to change its target for the federal funds rate on that date.
https://www.federalreserve.gov/monetarypolicy/fomc_historical_year.htm
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- https://courses.aplia.com/problemsetassets/macro/Fuller_Katrina/article.html question The Federal Reserve (or “the Fed” for short) conducts monetary policy in the United States. That is, the Fed decides how much money to supply to the economy. When the Fed increases the money supply, money becomes more abundant and the costs of borrowing money (that is, interest rates) fall. When the Fed reduces the money supply, money becomes scarce and interest rates rise. According to the Economic Outlook Group, an economic consultancy in New Jersey, higher energy prices resulting from Katrina may lead the Fed to __________ next time it meets.https://www.brookings.edu/research/fed-response-to-covid19/ reference this link for federal policy. I need the response to this questionE 1.7 The hypothetical information in the table below shows what the values for real GDP and the price level would have been in 2019 if the Federal Reserve did not use monetary policy: 4¹ F3 Year 2018 2019 49 $ 4 a) If the Fed wanted to keep real GDP at its potential level in 2019, should it have used an expansionary policy or a contractionary policy? Should the trading desk have bought T- bills or sold them? b) Suppose the Fed's policy was successful in keeping real GDP at its potential level in 2019. State whether each of the following would be higher or lower than if the Fed had taken no action: R a. Real GDP b. Full-employment real GDP c. The inflation rate d. The unemployment rate c) Draw an aggregate demand and aggregate supply graph to illustrate your answer. Be sure that your graph contains LRAS curves for 2018 and 2019; SRAS curves 2018 and 2019; AD curve for 2018 and 2019, with and without monetary policy actions; and equilibrium real GDP and the price level in 2019 with and…
- Read the scenario below and answer teh question that follows. The Federal Reserve Board announced an emergency rate cut on Sunday, March 15, lowering interest rates to near zero. This rate cut comes less than two weeks after the Fed cut interest rates by half a point and marks continued effort to minimize the economic impact of the coronavirus (COVID-19). Source: https://www.cnbc.com/select/impact-of-fed-rate-cut-amid-coronavirus-concerns/ A decrease in the rate of interest: A. Lowers the opportunity cost of money and leads to an increase in the quantity of money demanded. O B. Raises the opportunity cost of money and leads to a decrease in the quantity of money demanded. O C. Raises the opportunity cost of money and leads to an increase in the quantity of money demanded. O D. Lowers the opportunity cost of money and leads to a decrease in the quantity of money demanded.Federal Reserve Economic Data (FRED), from Federal Reserve Bank of Saint Louis provide the data in the chart below. In addition on Dec 14, 2016- the Federal Funds Rate was 0.41 percent per year, and on Dec 28, 2016 it was 0.66 percent per year. At the current level of the Federal Funds Rate, the Fed is. concerned about inflation 6.0 7.0- 6.0 5.0 4.0 3.0- 2.0 1.0 0.0- Federal funds rate (percent per year) 09/2006 09/2008 09/2010 Year more; than it is about the exchange rate less; than it is about unemployment more; than it is about unemployment less; than it is about government debt 09/2012 09/2014 09/2016Year 2022 2023 Potential Real GDP $18.1 trillion 18.4 trillion Real GDP $18.1 trillion 18.6 trillion Price Level 150 155 Refer to Table 15-6. Suppose the table above illustrates the values of real and potential GDP and the price level if the Fed does not vote to change their current policy to be more contractionary or expansionary. If the Fed wants to keep real GDP at its potential level in 2023, should the Fed use a contractionary or expansionary policy? Should it raise or lower its interest rate target? How should it conduct open market operations to achieve its goal?
- 5 You are an FOMC member, and you know that, in the last few recessions, the Fed cut interest rates by around 500 basis points. As the pandemic loomed in early 2020, the bottom of the Fed Funds target range was at 1.5 percent (the Fed only had around 150bp room to cut), while PCE inflation (your favourite inflation measure) was near the 2 percent target. What other options were available to the Fed? How do they work?//ng.cengage.com/static/nb/ui/evo/index.html?deploymentld 58326424525984828412294502&elSBN CENGAGE MINDTAP Q Search Aplia Homework: Monetary Theory and Policy 5.5 New Curve Money Demand 5.0 4.5 New Equilibrium 4.0 3.5 3.0 2.5 2.0 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 QUANTITY OF MONEY (Trillions of dollars) Suppose the Federal Reserve (the Fed) announces that it is raising its target interest rate by 50 basis points, or 0.50%. It would achieve this by Use the green line (triangle symbols) on the preceding graph to illustrate the effects of this policy. Place the the black point (plus symbol) on the graph to indicate the new equilibrium interest rate and quantity of money. The sequence of events that results in a new equilibrium interest rate, after the Fed makes the change you selected, may be described as follows: which means that bond issuers Because there is money in the financial system, the quantity of money demanded sell bonds. This process continues until the new equilibrium interest…In the graph you've just explored, if the Fed lowers the federal funds rate target range to 1.75 to 2.00 percent and conducts QE of $1 trillion, has the Fed done too little, too much, or got it just right to achieve full employment? A. Just right B. Too much C. Too little
- https://www.investopedia.com/ask/answers/033115/how-does-law-supply-and-demand-affect-prices.asp#:~:text=There%20is%20an%20inverse%20relationship,quantity%20of%20goods%20and%20services. review the following article found in Investopedia, Kramer, L. (April 29th, 2021). How does the law of supply and demand affect prices? Investopedia. Most goods respond to the relationship between price, supply, and demand. What happens when price controls are put in place such as for gasoline in the 1970s? Why? When does the Fed reduce interest rates and why? When does the Fed increase interest rates and why?9. What are the two parts of the Fed's dual mandate? Answer the following with the dual mandate and bullseye chart in terms of signals to the Fed about the status of economy. The Fed's dual mandate, given to it by Congress in should be federal employment and stable prices. The bullseye chart was developed by the Federal Reserve Bank of Chicago. It is a visual comparison of the current state of the economy with the Fed's dual mandate. The chart shows the inflation rate on the ( horizontal, vertical ) axis and the unemployment rate on the ( horizontal, vertical ) axis and has crosshairs where the two targets meet. The southwest (lower left) and northeast (upper right) quadrants send conflicting messages about which monetary policy is appropriate. If the point showing the actual rates of unemployment and inflation lies (northwest, southeast, southwest, northeast ) of the center of the bullseye, the Fed will be in a policy predicament. The fact that the actual unemployment rate is below…The Federal Reserve has raised the Federal Funds rate by 3.75 percent within the past year. Ifa bank had capital of 10 percent when the Fed began raising rates and has no loans at risk ofdefault, under what circumstances will its capital position be compromised? Please be specific.