urrently the Federal Reserve is gradually raising interest rates. What challenges come with doing that in an economically healthy way? If they were lowering rates, what challenges would come with that?

Q: As early as the year 1000 CE, nigeria used silver and other metal coins as currency.  This is an…

A: Commodity money is the money that as certain intrinsic value. The intrinsic value is derived from…

Q: Critics of federal banking policy argue that deposit insurance is a key reason for banking failures.…

A: When depositors are given confidence about their money, in case a bank fails, it is "deposit…

Q: If bondholders expect the Fed to raise interest rates, what action might they take? How would this…

A: If there is an expectation of a rise in interest rates in future then holding bonds will become a…

Q: There was a temporary increase in the price of oil. Why does an increase in price of oil pose a…

A: FED faces a trade-off i.e. dilemma of either lowering the inflation rate or increasing real GDP. FED…

Q: In 1989 the Government made it legal for banks to offer interest on checking accounts. Before this…

A: Federal Reserve: The Federal Reserve or the Fed acts as a central bank for the US economy. The main…

Q: Is either helicopter money or quantitative easing preferred in times of severe recessions in order…

A: Helicopter money and quantitative easing are the two monetary policy concepts which can be used…

Q: Is it preferable for central banks to primarily target inflation or unemployment? Why?

A: Unemployment is a situation in which workers in the economy are willing to work at the prevailing…