Exam 15: Tools of Monetary Policy

Which of the following monetary policy tools is more effective when the economy faces the interest rate zero-lower-bound problem?

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.

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

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

To lower interest rates on residential mortgages to stimulate the housing market,the Fed extended its open market operations to purchase

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

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

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

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

Which of the following statements is an example of the Fed's conditional commitment policy?

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 ________.

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.

The discount rate refers to the interest rate on

The actual execution of open market operations is done at

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 Federal Reserve has had the authority to vary reserve requirements since the

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

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

If the Fed wants to temporarily inject reserves into the banking system,it will engage in

The policy tool of changing reserve requirements is