Exam 15: Tools of Monetary Policy

When bad storms slow the check-clearing process,float tends to ________ causing the Fed to initiate ________ open market ________.

The interest rate for primary credit is usually set ________ basis points ________ the federal funds rate.In March 2008,this gap was changed to ________ basis points.

In the market for reserves,if the federal funds rate is between the discount rate and the interest rate paid on excess reserves,a decline in the reserve requirement ________ the ________ curve of reserves and causes the federal funds interest rate to fall,everything else held constant.

Suppose,at a given federal funds rate,there is an excess demand for reserves in the federal funds market.If the Fed wants the federal funds rate to stay at that level,then it should undertake an open market ________ of bonds,everything else held constant.If the Fed does nothing,however,the federal funds rate will ________.

Everything else held constant,in the market for reserves,when the federal funds rate is 5%,lowering the discount rate from 5% to 4%

An increase in ________ reduces the money supply since it causes the ________ to fall.

If float is predicted to decrease because of unseasonably good weather,the manager of the trading desk at the Federal Reserve Bank of New York will likely conduct a ________ open market ________ of securities.

A financial panic was averted in October 1987 following "Black Monday" when the Fed announced that

If Treasury deposits at the Fed are predicted to ________,the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves.

If the Fed expects currency holdings to fall,it conducts open market ________ to offset the expected ________ in reserves.

The European System of Central Banks signals the stance of its monetary policy by setting a target for the

In the market for reserves,if the federal funds rate is above the interest rate paid on excess reserves,an open market sale ________ the ________ of reserves,causing the federal funds rate to increase,everything else held constant.

When good weather speeds the check-clearing process,float tends to ________ causing the Fed to initiate defensive open market ________.

Everything else held constant,the vertical section of the supply curve of reserves is lengthened when the

Everything else held constant,in the market for reserves,when the federal funds rate is 3%,lowering the interest rate paid on excess reserves rate from 2% to 1%

Open market sales shrink ________ thereby lowering ________.

Everything else held constant,in the market for reserves,when the supply for federal funds intersects the reserve demand curve on the downward sloping section,decreasing the interest rate paid on excess reserves

If Treasury deposits at the Fed are predicted to ________,the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves.

The most common type of discount lending,________ credit loans,are intended to help healthy banks with short-term liquidity problems that often result from temporary deposit outflows.

Funds held in ________ are subject to reserve requirements.