Why is it necessary to distinguish between the target federal funds rate range and the market federal funds rate?
What will be an ideal response?
The need to distinguish the two comes from the fact that while the FOMC can set a target range that they would like to see for the federal funds rate, the actual rate is determined in the market, meaning it is set by supply and demand. The Fed alters the supply of reserves, usually early in the day, the demand for reserves though is not certain and since it can change the actual market federal funds rate can and does deviate from the target.
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A method of measuring the money supply by looking at money as a temporary store of value is the
A) transactions approach. B) capital control. C) liquidity approach. D) fiduciary monetary system.
How would a marketing campaign directed at single women improve the chances of success at a place like a cigar bar?
What will be an ideal response?
The price index was 220 in one year and 238.2 in the next year. What was the inflation rate?
a. 8.3 percent b. 108.3 percent c. 4.8 percent d. 38.2 percent
If the economy is self-regulating and in a recessionary gap, what happens?
A) Wages rise, the SRAS curve shifts leftward, and both Real GDP and the price level rise. B) Wages fall, the SRAS curve shifts leftward, the price level rises, and Real GDP falls. C) Wages fall, the SRAS curve shifts rightward, and both the price level and Real GDP fall. D) Wages fall, the SRAS curve shifts rightward, the price level falls, and Real GDP rises. E) none of the above