2. The Federal Reserve enacts dynamic monetary policy by changing bank reserves to combat inflation and recession; it en
Posted: Sun Jun 05, 2022 4:28 pm
2. The Federal Reserve enacts dynamic monetary policy by changing
bank reserves to combat inflation and recession; it enacts
defensive monetary policy to maintain the existing level of bank
reserves and status of the economy. (T/F)
3. To offset temporary cash drains out of the banking system that
occur during the Christmas season, the Federal Reserve enacts
reverse repurchase agreements (reverse repos) in the securities
market. (T/F)
4. Suppose that on any given day the prevailing equilibrium federal
funds rate is below the Federal Reserve's federal funds target
rate. If the Federal Reserves wishes for the federal funds rate to
be permanently at the target level, then the appropriate policy for
the Federal Reserve is to take a defensive open market purchase,
everything else held constant. (T/F)
bank reserves to combat inflation and recession; it enacts
defensive monetary policy to maintain the existing level of bank
reserves and status of the economy. (T/F)
3. To offset temporary cash drains out of the banking system that
occur during the Christmas season, the Federal Reserve enacts
reverse repurchase agreements (reverse repos) in the securities
market. (T/F)
4. Suppose that on any given day the prevailing equilibrium federal
funds rate is below the Federal Reserve's federal funds target
rate. If the Federal Reserves wishes for the federal funds rate to
be permanently at the target level, then the appropriate policy for
the Federal Reserve is to take a defensive open market purchase,
everything else held constant. (T/F)