True or False: The government securities purchased by the Federal Reserve ("the Fed") in normal open-market operations have a longer term than the government bonds the Fed purchases for quantitative easing. True zero. False Quantitative easing is an example of monetary policy, which is generally used when the federal funds rate is

True or False: The government securities purchased by the Federal Reserve ("the Fed") in normal open-market operations have a longer term than the government bonds the Fed purchases for quantitative easing. True zero. False Quantitative easing is an example of monetary policy, which is generally used when the federal funds rate is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following can be described accurately as “policy rates adjusted by the Fed?” (a) federal funds rate and interest on excess reserves; (b) discount rate and prime rate; (c) 31-day Treasury bill rate and the 30-year Treasury bond rate; (d) discount rate and 30-year mortgage interest rate
Which of the following would be most likely to induce the Federal Reserve to conduct expansionary monetary policy? A significant decrease inoil prices. business taxes. income tax rates. investment spending.
Which of the statements best describes the monetary rule, as proposed by the economist Milton Friedman? An acceptable rate of unemployment is targeted and the money supply is adjusted accordingly. Inflation is kept in check by directly manipulating interest rates to decrease bond prices. Inflation is kept in check by increasing the growth of M1 and decreasing the growth of M2 in equal amounts. Inflation is kept in check in the long run by keeping the growth of M1 and M2 on a steady path.
When the Federal Reserve buys bonds, it effectively lowers the nominal interest rate in the market. true false
Higher unemployment rates for those 25 years old and younger in many European nations, in comparison to the United States, is best explained by the differing monetary policies between the European Central Bank and the Federal Reserve. True False
Explain the modern monetary policy instruments (Quantitative Easing, Credit Easing, Interest Rate Corridor) of Central Banks, briefly.