Which of the following is a traditional tool used by the Fed during recessions?

Q: Why do Fed policies aim to keep the level of interest rates low in recent years? How have those…

A:

Q: What was Ben Bernanke (Federal reserve current chairman) philosophy in regard to how to deal with…

A: Philosophy of Ben Bernanke As the chairman,  Ben Bernanke took an aggressive and experimental…

Q: What are the main determinants of the federal funds rate?

A: Federal funds rate is the rate at which commercial banks borrow from and lend to each other.

Q: How does the structiure of the Fed reflect a compromise between centralized (federal) power and…

A: Central Bank Consist of  The composers of the Federal Reserve Act deliberately dismissed the idea of…

Q: If the economy is able to self-correct from a negative GDP gap, why might the Fed wish to intervene…

A: A self-correcting economy refers to one that has the ability to stabilize the market without…

Q: If a Central Bank decides it needs to decrease both the aggregate demand and the money supply, then…

A: Central bank can able to increase and decrease money supply with the help of various tools like…

Q: What are the effective Central Bank Frameworks?

A: The operational frameworks of central banks influence their choices and actions. As market…

Q: Designers of the Federal Reserve System were concerned that the Fed might form policy favorable to…

A: The Federal Reserve System is the US government's central banking authority. It serves as the US…

Q: Outline to the policy choices for contractionary and expansionary   options of the Fed.

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Q: The Fed. was created in 1913. How stable were prices from 1801 - 1912?

A: The Federal Reserve System came into existence with the Federal Reserve Act of 1913. The Fed is…

Q: Why is there a lag between the Fed’s actions and the economy’s response?

A: In the behaviour of the Fed and the response of the economy, there is a time lag. The point of touch…

Q: What is the difference between contractionary monetary policy and expansionary monetary policy and…

A: Monetary policy is the action taken by the central bank to control the overall supply of money and…

Q: How has the balance sheet of the Fed changed over the years? Explain why

A: The central system of banking of the United States of America is the Fed or the Federal Reserve…

Q: Discuss how the central bank increase the federal funds rate ripples through the different sectors…

A: The economies around the world tend to focus on their growth and development through various…

Q: The Fed has an obligation of the "full employment mandate". What is that exactly? How is it…

A: The Federal Reserve in the U.S was created on 23rd December 1913. It is the central bank of the U.S.…

Q: How does the Federal reserve Bank "influence" interest rates to meet the objectives of the Fed?

A: The first tool that is used by the Fed to meet the objectives is to manipulate short-term interest…

Q: Describe the tools used by the Fed since March 2020, including some new non-traditional tools. What…

A: The economic downturn precipitated by the US coronavirus epidemic led to the closure of numerous…

Q: What are the characteristics of the Central Bank.

A: Central Bank is an apex institute under which all the commercial banks are registered. Central Bank…

Q: Let's pretend the economy is in a horrible recession, inflation is rising, and interest rates are…

A: A recession is a period in which the output level is below the potential level of output and the…

Q: Why does the Fed manipulate the money supply ? Why might a price "freeze" help monetary policy to…

A: The Fed is the main authority which manipulates the money supply in the economy because it initiates…

Q: newspaper that the Fed has just lowered the discount rate.  Does this signal that the Fed is moving…

A: Yes it  signals to the adoption of expansioady policy by the central bank.  Expansionary policy is…

Q: Fill in the blanks The tools that the Fed uses to influence the economy are  (blank) , (blank)  ,…

A: The following problem has been answered as follows:

Q: are open market operations the most important tool that the Fed has to help stabilize the economy?

A: Monetary policy: Monetary policy is the tool in the hands of the central bank of a country which…

Q: Monetary policy actions by the Fed are

A:

Q: Describe two concepts of central bank independence. Is the Fed politically independent? Why do…

A: Goal independence and instrument independence are two types of central bank independence. In case of…

Q: In what ways does the Fed utilize their monetary policy tools to affect or counter-balance fiscal…

A: Fiscal policy refers to the method of government spending and tax policies to take a control over…

Q: What methods can be used by the FED to influence interest rates? Are these methods effective?

A: Please find the answer below.

Q: What action did the FOMC take, if any, regarding the level of the fedfunds rate? Why did it make…

A: The federal funds rate is the central bank's targeted interest rate where the financial institutions…

Q: In a period of deflation, the Fed would most likely A) decrease the required reserve ratio. C) All,…

A: General decline in prices of products typically related to a contraction within the supply of cash…

Q: Do you think the central bank should conduct policy using rules or discretion? Explain.

A: Central bank is the apex bank of any country which performs promotional  and regulatory function for…

Required Reserve and Excess Reserve Analysis

A required reserve is an amount of cash that banks must keep with themselves, which is certain percentage of the deposits made by their customers. Required reserve is a percentage of the bank's deposits that the respective bank must have on each overnight. The percentage rate is set and determined by the nation’s central bank. It is important to have such funds accumulated to meet its uncertain obligations, sudden liabilities and withdrawals. Required reserve is also known as reserve ratio. Reserve ratio is an important tool to control the money supply.