Exam 15: Tools of Monetary Policy

In the market for reserves,a lower discount rate

The interest rate on secondary credit is set ________ basis points ________ the primary credit 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 ________ the demand for reserves,raising the federal funds interest rate,everything else held constant.

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.

The actual execution of open market operations is done at

Suppose on any given day there is an excess supply 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.

When the federal funds rate equals the interest rate paid on excess reserves

The Fed's discount lending is of three types: ________ is the most common category;________ is given to a limited number of banks in vacation and agricultural areas;________ is given to banks that have experienced severe liquidity problems.

The quantity of reserves supplied equals

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.

The equivalent to the Federal Reserve's discount rate in the European System of Central Banks is the

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

The discount rate is kept ________ the federal funds rate because the Fed prefers that ________.

The policy tool of changing reserve requirements is

The interest rate on seasonal credit equals

Which of the following statements about the deposit facility in the Eurosystem are correct?

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

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

Everything else held constant,in the market for reserves,when the demand for federal funds intersects the reserve supply curve on the vertical section,increasing the discount rate

If float is predicted to increase because of bad weather,the manager of the trading desk at the New York Fed bank will likely conduct ________ open market operations to ________ reserves.