Federal Funds Rate: The federal fund rate affects the fiscal and the monetary policy of the U.S. The rate at which one bank lends to another bank for a short term basis is known as federal fund rate.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 19, Problem 1P

To determine

Concept Introduction:

Federal Funds Rate: The federal fund rate affects the fiscal and the monetary policy of the U.S. The rate at which one bank lends to another bank for a short term basis is known as federal fund rate.

Expert Solution & Answer

Explanation of Solution

a. Target Federal fund rate.

Target Federal fund rate is 1.5% on December 13, 2017.

Conclusion:

Thus, current target federal fund rate is 1.5%

b. Comparison of target federal fund rate.

The target federal fund rate of current Federal Open Market Committee (FOMC) statement is 1.5% on December 31, 2017 which was 1.25% on June 14, 2017.
Therefore, the target federal funds rate of current FOMC statement is different from the previous FOMC statement. So it differs by 0.25%.

Conclusion:

Thus, target federal fund rate differs by 0.25%.

c. Macroeconomic condition.

The macroeconomic condition of the U.S can be justified by the FOMC statement regarding federal fund rate. There is an increase in the economic activities of the U.S. and with this increase, the unemployment has decreased.
There is an increase in both consumption and investment. In the short run, the economy is growing and in the long run, inflation is expected.

Conclusion:

Thus, there is an increase in the economic activities of the U.S.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Thanks in advance!

I need help figuring this out. I'm pretty sure this is correct?If Zambia is open to international trade in oranges without any restrictions, it will import 180 tons of oranges.I can't figure these two out: 1) Suppose the Zambian government wants to reduce imports to exactly 60 tons of oranges to help domestic producers. A tariff of ???? per ton will achieve this. 2) A tariff set at this level would raise ????in revenue for the Zambian government.

16:10 ← BEC 3701 - Assignments-... KWAME NKRUMAH UNIVERSITY TEACHING FOR EXCELLENCE SCHOOL OF BUSINESS STUDIES DEPARTMENT OF ECONOMICS AND FINANCE ADVANCED MICRO-ECONOMICS (BEC 3701) Assignments INSTRUCTIONS: Check instructions below: LTE 1) Let u(q1,q2) = ln q₁ + q2 be the (direct) utility function, where q₁ and q2the two goods. Denote P₁ and P2 as the prices of those two goods and let M be per period money income. Derive each of the following: a) the ordinary or Marshallian demand functions q₁ = d₂ (P₁, P₂, M) for i = 1,2 [3 Marks] b) the compensated or Hicksian demand functions q₁ = h₂ (P₁, P2, M) for i = 1,2 [3 Marks] c) the Indirect Utility Function uº = v(P₁, P2, M) [3 Marks] d) the Expenditure Function E(P1, P2, U°) [3 Marks] e) Draw a diagram of the solution. There should be two graphs, one above the other; the first containing the indifference curves and budget constraint that characterize the solution to the consumer's choice problem; the second characterizing the demand…

Answer 2

Question

Chapter 19, Problem 1P

To determine

Concept Introduction:

Federal Funds Rate: The federal fund rate affects the fiscal and the monetary policy of the U.S. The rate at which one bank lends to another bank for a short term basis is known as federal fund rate.

Expert Solution & Answer

Explanation of Solution

a. Target Federal fund rate.

Target Federal fund rate is 1.5% on December 13, 2017.

Conclusion:

Thus, current target federal fund rate is 1.5%

b. Comparison of target federal fund rate.

The target federal fund rate of current Federal Open Market Committee (FOMC) statement is 1.5% on December 31, 2017 which was 1.25% on June 14, 2017.
Therefore, the target federal funds rate of current FOMC statement is different from the previous FOMC statement. So it differs by 0.25%.

Conclusion:

Thus, target federal fund rate differs by 0.25%.

c. Macroeconomic condition.

The macroeconomic condition of the U.S can be justified by the FOMC statement regarding federal fund rate. There is an increase in the economic activities of the U.S. and with this increase, the unemployment has decreased.
There is an increase in both consumption and investment. In the short run, the economy is growing and in the long run, inflation is expected.

Conclusion:

Thus, there is an increase in the economic activities of the U.S.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 19, Problem 1P

To determine

Concept Introduction:

Federal Funds Rate: The federal fund rate affects the fiscal and the monetary policy of the U.S. The rate at which one bank lends to another bank for a short term basis is known as federal fund rate.

Expert Solution & Answer

Explanation of Solution

a. Target Federal fund rate.

Target Federal fund rate is 1.5% on December 13, 2017.

Conclusion:

Thus, current target federal fund rate is 1.5%

b. Comparison of target federal fund rate.

The target federal fund rate of current Federal Open Market Committee (FOMC) statement is 1.5% on December 31, 2017 which was 1.25% on June 14, 2017.
Therefore, the target federal funds rate of current FOMC statement is different from the previous FOMC statement. So it differs by 0.25%.

Conclusion:

Thus, target federal fund rate differs by 0.25%.

c. Macroeconomic condition.

The macroeconomic condition of the U.S can be justified by the FOMC statement regarding federal fund rate. There is an increase in the economic activities of the U.S. and with this increase, the unemployment has decreased.
There is an increase in both consumption and investment. In the short run, the economy is growing and in the long run, inflation is expected.

Conclusion:

Thus, there is an increase in the economic activities of the U.S.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 19, Problem 1P

To determine

Concept Introduction:

Federal Funds Rate: The federal fund rate affects the fiscal and the monetary policy of the U.S. The rate at which one bank lends to another bank for a short term basis is known as federal fund rate.

Expert Solution & Answer

Explanation of Solution

a. Target Federal fund rate.

Target Federal fund rate is 1.5% on December 13, 2017.

Conclusion:

Thus, current target federal fund rate is 1.5%

b. Comparison of target federal fund rate.

The target federal fund rate of current Federal Open Market Committee (FOMC) statement is 1.5% on December 31, 2017 which was 1.25% on June 14, 2017.
Therefore, the target federal funds rate of current FOMC statement is different from the previous FOMC statement. So it differs by 0.25%.

Conclusion:

Thus, target federal fund rate differs by 0.25%.

c. Macroeconomic condition.

The macroeconomic condition of the U.S can be justified by the FOMC statement regarding federal fund rate. There is an increase in the economic activities of the U.S. and with this increase, the unemployment has decreased.
There is an increase in both consumption and investment. In the short run, the economy is growing and in the long run, inflation is expected.

Conclusion:

Thus, there is an increase in the economic activities of the U.S.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 19, Problem 1P

To determine

Concept Introduction:

Federal Funds Rate: The federal fund rate affects the fiscal and the monetary policy of the U.S. The rate at which one bank lends to another bank for a short term basis is known as federal fund rate.

Expert Solution & Answer

Explanation of Solution

a. Target Federal fund rate.

Target Federal fund rate is 1.5% on December 13, 2017.

Conclusion:

Thus, current target federal fund rate is 1.5%

b. Comparison of target federal fund rate.

The target federal fund rate of current Federal Open Market Committee (FOMC) statement is 1.5% on December 31, 2017 which was 1.25% on June 14, 2017.
Therefore, the target federal funds rate of current FOMC statement is different from the previous FOMC statement. So it differs by 0.25%.

Conclusion:

Thus, target federal fund rate differs by 0.25%.

c. Macroeconomic condition.

The macroeconomic condition of the U.S can be justified by the FOMC statement regarding federal fund rate. There is an increase in the economic activities of the U.S. and with this increase, the unemployment has decreased.
There is an increase in both consumption and investment. In the short run, the economy is growing and in the long run, inflation is expected.

Conclusion:

Thus, there is an increase in the economic activities of the U.S.

Answer 6

Chapter 19, Problem 1P

To determine

Concept Introduction:

Federal Funds Rate: The federal fund rate affects the fiscal and the monetary policy of the U.S. The rate at which one bank lends to another bank for a short term basis is known as federal fund rate.

Expert Solution & Answer

Explanation of Solution

a. Target Federal fund rate.

Target Federal fund rate is 1.5% on December 13, 2017.

Conclusion:

Thus, current target federal fund rate is 1.5%

b. Comparison of target federal fund rate.

The target federal fund rate of current Federal Open Market Committee (FOMC) statement is 1.5% on December 31, 2017 which was 1.25% on June 14, 2017.
Therefore, the target federal funds rate of current FOMC statement is different from the previous FOMC statement. So it differs by 0.25%.

Conclusion:

Thus, target federal fund rate differs by 0.25%.

c. Macroeconomic condition.

The macroeconomic condition of the U.S can be justified by the FOMC statement regarding federal fund rate. There is an increase in the economic activities of the U.S. and with this increase, the unemployment has decreased.
There is an increase in both consumption and investment. In the short run, the economy is growing and in the long run, inflation is expected.

Conclusion:

Thus, there is an increase in the economic activities of the U.S.

Answer 7

Chapter 19, Problem 1P

To determine

Concept Introduction:

Federal Funds Rate: The federal fund rate affects the fiscal and the monetary policy of the U.S. The rate at which one bank lends to another bank for a short term basis is known as federal fund rate.

Answer 8

Expert Solution & Answer

Explanation of Solution

a. Target Federal fund rate.

Target Federal fund rate is 1.5% on December 13, 2017.

Conclusion:

Thus, current target federal fund rate is 1.5%

b. Comparison of target federal fund rate.

The target federal fund rate of current Federal Open Market Committee (FOMC) statement is 1.5% on December 31, 2017 which was 1.25% on June 14, 2017.
Therefore, the target federal funds rate of current FOMC statement is different from the previous FOMC statement. So it differs by 0.25%.

Conclusion:

Thus, target federal fund rate differs by 0.25%.

c. Macroeconomic condition.

The macroeconomic condition of the U.S can be justified by the FOMC statement regarding federal fund rate. There is an increase in the economic activities of the U.S. and with this increase, the unemployment has decreased.
There is an increase in both consumption and investment. In the short run, the economy is growing and in the long run, inflation is expected.

Conclusion:

Thus, there is an increase in the economic activities of the U.S.