What two monetary policy tools does the Fed now rely on in changing its target for the federal funds rate? Briefly describe how the Fed can use these tools to lower its target for the federal funds rate. (Choose two from the list below.) If the Fed uses these two new policy tools to manage the federal funds rate, it can lower its target rate by A. using a policy of quantitative easing to buy long-term securities B. lowering the interest rate it pays on overnight reverse repurchase facilities C. increasing the interest rate it pays on banks' excess reserves D. raising the interest rate it pays on overnight reverse repurchase facilities E. decreasing the interest rate it pays on banks' excess reserves

What two monetary policy tools does the Fed now rely on in changing its target for the federal funds rate? Briefly describe how the Fed can use these tools to lower its target for the federal funds rate. (Choose two from the list below.) If the Fed uses these two new policy tools to manage the federal funds rate, it can lower its target rate by A. using a policy of quantitative easing to buy long-term securities B. lowering the interest rate it pays on overnight reverse repurchase facilities C. increasing the interest rate it pays on banks' excess reserves D. raising the interest rate it pays on overnight reverse repurchase facilities E. decreasing the interest rate it pays on banks' excess reserves

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter13: Monetary Policy

Section: Chapter Questions

Problem 9E

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