Exam 15: Tools for Monetary Policy

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

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

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

Much of the credit for prevention of a financial market meltdown after "Black Monday" (October 19,1987)must be given to the Federal Reserve System and its chairman

Since the European Central Bank ________ interest on reserves,banks have a ________ cost of complying with reserve requirements when compared to banks complying with the reserve requirements of the Federal Reserve.

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%

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

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

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.

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 most important advantage of discount policy is that the Fed can use it to

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.

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

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

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 for reserves,________ the federal funds rate,everything else held constant.

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

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 ________.

At its inception,the Federal Reserve was intended to be

Everything else held constant,in the market for reserves,when the supply for federal funds intersects the reserve demand curve along the horizontal section,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