The Federal Reserve banks play a role in formulating monetary policy by each of the following, except:
A. making discount loans.
B. participation in setting the discount rate.
C. participating in FOMC meetings.
D. conducting open market operations from their banks.
Answer: D
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If the nominal interest rate is above the equilibrium value, then the quantity demanded of money is ________ than the quantity supplied of money, bond prices will ________, and the nominal interest rate will ________.
A. greater; rise; increase B. less; rise; decrease C. greater; fall; increase D. less; fall; increase
Suppose that Firm ABC currently has a market share of 8 percent. Firm XYZ has a market share of 12 percent. What will happen to the Herfindahl-Hirschman index if the two firms merge? Show your work
What will be an ideal response?
If ft denotes the forecast of yt+1 made at time t, then the forecast error is given by:
A. et+1 = ft/yt+1. B. et+1 = yt+1/ft. C. et+1 = yt+1 + ft. D. et+1 = yt+1- ft.
The discount window provides:
A. guaranteed emergency funds for banks in trouble at a lower interest rate than others. B. guaranteed emergency funds for banks in trouble at a higher interest rate than federal funds rate. C. loans to banks at low interest rates, only when the economy is doing well. D. loans to banks at low interest rates, so they can lend more money out to the public.