Exam 15: Tools of Monetary Policy

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,lowering the federal funds interest rate,everything else held constant.

A decrease in ________ increases the money supply since it causes the ________ to rise.

________ are the most important monetary policy tool because they are the primary determinant of changes in the ________,the main source of fluctuations in the money supply.

If float is predicted to decrease because of good weather,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.

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

The purpose for a central bank to set negative interest rates on bank's deposit is to

Discount policy affects the money supply by affecting the volume of ________ and the ________.

Open market purchases raise the ________ thereby raising the ________.

The discount rate is

The interest rate charged on overnight loans of reserves between banks is the

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

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

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

Open market purchases ________ reserves and the monetary base thereby ________ the money supply.

Everything else held constant,in the market for reserves,decreases in the interest rate paid on excess reserves affect the federal funds rate

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

When the Federal Reserve engages in a repurchase agreement to offset a withdrawal of Treasury funds from the Federal Reserve,the open market operation is said to be

Open market operations intended to offset movements in noncontrollable factors (such as float)that affect reserves and the monetary base are called

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