The Federal Reserve System and OpenMarket Operations_ Ask FREDThe accompanying graph depicts theeffective Federal Funds Rate from 2007to 2018.FRED-Effective Federal Funds Rate42200820102012201420162018Source: Board of Governors of the Federal Reserve System (US)b. What was the Federal Funds rate in January 2009?Enter your answer to two places after the decimal.

The Fed Fund Rate: This is the rate at which country’s financial institution (banks and credit…

Answered: The Federal Reserve System and Open…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Use the diagram to answer the following question. Board of Governors Federal Open Market Committee ??? Member Banks Which of these correctly completes the diagram? A. 12 Federal Reserve District Banks B. Federal Reserve Chairman C. President of the United States D. The United States Senate
Figure 31-3 On the following graph, MS represents the money supply and MD represents money demand. VALUE OF MONEY 0.6 0.45 5000 MS, MS 9000 QUANTITY OF MONEY MD Refer to Figure 31-3. Which of the following events could explain a shift of the money-supply curve from MS₁ to MS2? An increase in the value of money A decrease in the price level An open-market purchase of bonds by the Federal Reserve The Federal Reserve sells bonds
Use the following graph for the federal funds market to answer the next question. Q₁ Q1 Q12 Quantity of Reserves Multiple Choice O C If the Fed wants the federal funds rate to be at if, what quantity of reserves do they need to make available to banks? Qf1 Qf2 D₁ Qf3 Sp Sm S₂ It cannot be determined with the information given.
Page 4 5. Use the following T-account information and the fact that the required reserve ratio in this economy is 0.10 (i.c., 10 %) to answer the questions below (Show your work) Treasury dd T 20 Bonds 600 Bonds Loans to Fed 300 dd 190 B dd 100 T 20 Banks FRN 200 Public 1500 Loans from Banks 850 Banks Cash 60 dd p 1500 dd p P dd B 190 Other Cash 150 Loans to Deposits 100 Bonds 100 Public 850 Loans from Other Bonds 100 Fed 100 Deposits 100 a. What are the Bank Reserves? b. What are the Bank Required Reserves? c. What are the Bank Excess Reserves? d. What is the current Money Supply (MI)? e. If Banks maximized their Loans to the Public, using up all their excess reserves, what will be the new Money Supply? f. The Fed did not like the new Money Supply and sold 40 in Bonds to Banks. After the banks bought the bonds, they have to call in loans from the public. What will be the new Money Supply end up being after the banks made the required changes? g. If the Banks refused the buy the 40 in…
Please graphically show and explain how the Fed raises interest rate before 2008 and after 2015 respectively.
M7
please also do the graphs thankyouuuu
Suppose Federal Reserve wants to reduce money supply. How could Federal Reserve reduce money supply through the open market operations? Show your answers in a diagram. Your diagram should also show interbank loans. To reduce money supply, should Fed increase or decrease Fed funds rate? For the Fed Funds rate, who is a borrower? Who is a lender? For the discount rate, who is a borrower? Who is the lender?
In a speech to the Fed conference in Jackson Hole, Wyoming, given eight months after the Fed had raised its target for the federal funds rate for the first time since 2006, then Fed Chair Janet Yellen observed that the 2007-2009 financial crisis had revealed the Fed's "inability to control the federal funds rate once reserves were no longer relatively scarce." She went on to state: "To address the challenges posed by the financial crisis ... the Federal Reserve significantly expanded its monetary policy toolkit.... Our current toolkit proved effective last December. In an environment of superabundant reserves, the FOMC raised the effective federal funds rate. What does Yellen mean by "reserves were no longer relatively scarce"? Before the financial crisis, banks chose to hold relatively low levels of excess reserves, but since the 2007-2009 financial crisis, banks are choosing to hold significantly more excess reserves. Briefly explain why, with the monetary policy tools it had used…
What would happen to the federal funds rate if there was an increase in the amount of checkabledeposits (holding everything else constant) and the federal funds rate was initially at the interest rate paidon excess reserves? (i1ff = ioer)? Graph the initial and the new equilibrium
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 09/2016
Briefly describe the main policy tools that Fed use in conducting its monetary policy?

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