Exam 15: Tools of Monetary Policy

When the European System of Central Banks uses long-term refinancing operations,it is similar to the Federal Reserve using

In the market for reserves,when the federal funds interest rate is below the discount rate,the supply curve of reserves is

Everything else held constant,in the market for reserves,when the supply for federal funds intersects the reserve demand curve along the horizontal section of the demand curve,lowering the interest rate paid on excess reserves

When the European System of Central Banks uses main refinancing operations,it is similar to the Federal Reserve using

Everything else held constant,when the federal funds rate is ________ the interest rate paid on reserves,the quantity of reserves demanded rises when the federal funds rate ________.

In the market for reserves,if the federal funds rate is between the discount rate and the interest rate paid on excess reserves,a ________ in the reserve requirement decreases the demand for reserves,________ the federal funds interest rate,everything else held constant.

The Federal Reserve will engage in a repurchase agreement when it wants to ________ reserves ________ in the banking system.

Explain dynamic and defensive open market operations.What is the purpose of each type? Describe two situations when defensive open market operations are used.How are defensive open market operations typically conducted?

Suppose on any given day the prevailing equilibrium federal funds rate is above the Federal Reserve's federal funds target rate.If the Federal Reserve wishes for the federal funds rate to be at their target level,then the appropriate action for the Federal Reserve to take is a ________ open market ________,everything else held constant.

The two types of open market operations are

The quantity of reserves supplied equals

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

Suppose on any given day there is an excess demand of reserves in the federal funds market.If the Federal Reserve wishes to keep the federal funds rate at its current level,then the appropriate action for the Federal Reserve to take is a ________ open market ________,everything else held constant.

Everything else held constant,in the market for reserves,increases in the discount rate affect the federal funds rate

In the market for reserves,if the federal funds rate is between the discount rate and the interest rate paid on excess reserves,a ________ in the reserve requirement increases the demand for reserves,________ the federal funds interest rate,everything else held constant.

The policy tool of changing reserve requirements is

Everything else held constant,in the market for reserves,when the federal funds rate equals the interest rate paid on excess reserves,raising the interest rate paid on excess reserves

At its inception,the Federal Reserve was intended to be

The facility that was created in December of 2007 that banks can use to borrow from the Fed that has less of a stigma for banks compared to borrowing from the discount window is the

In the market for reserves,when the federal funds rate is above the interest rate paid on excess reserves,the demand curve for reserves is