Exam 10: Conduct of Monetary Policy: Tools, Goals, Strategy, and Tactics

In response to an asset-price bubble, macroprudential regulation appears to be the right tool. What is macroprudential regulation?

If the Federal Reserve wants to drain reserves from the banking system, it will

An open market sale of securities by the Fed will

The federal funds rate is an operating target.

Describe what criteria is applied when choosing a policy instrument.

The Federal Reserve desires interest rate stability because

When the Federal Reserve was created, its most important role was intended to be

If the Fed wants to temporarily drain reserves from the banking system, it will engage in

The Federal Reserve will engage in an outright purchase if it wants to ________ reserves ________ in the banking system.

If the desired intermediate target is an interest rate, then the preferred operating target will be a(n)________ variable like the ________.

Which of the following is a potential operating target for the Fed?

The supply curve for reserves is ________ when the federal funds rate is below the discount rate and ________ when the federal funds rate is above the discount rate.

When workers voluntarily quit a job or decline a job offer so they can search for a better one, the resulting unemployment is called

When a bank repays a discount loan to the Fed, there is a(n)________ in reserves in the banking system and a(n)________ in the monetary base.

Discount loans to healthy banks, who may borrow as much as they wish from the Fed, are called