Suppose on any given day the prevailing equilibrium federal funds rate is below the Federal Reserve's federal funds target rate
If the Federal Reserve wishes for the federal funds rate to be at their target level, then the appropriate action for the Federal Reserve to take is a ________ open market ________, everything else held constant. A) defensive; sale
B) defensive; purchase
C) dynamic; sale
D) dynamic; purchase
C
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Refer to the table above. If countries were to trade along the lines of comparative advantage
A) B would export Y to A. B) A would import X from A. C) neither country would want to trade. D) More information is needed to determine the pattern.
Within the framework of the AD-AS model, an increase in savings by households will
a. increase the supply of loanable funds and reduce interest rates. b. be offset by a decrease in savings by businesses. c. cause long-run fluctuations in the rate of consumption. d. result in a decline in aggregate demand, output, and employment.
The figure above shows the market for bank reserves in Futureland. If the Bank of Futureland undertakes an open market purchase of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will
A) fall to 4 percent a year.
B) remain at 6 percent a year.
C) rise to 8 percent a year.
D) change, but more information is needed to determine by how much.
E) None of the above answers is correct.
What is the "division of labor"? How is the division of labor related to production?
What will be an ideal response?