What is the Fed's monetary policy instrument?
What will be an ideal response?
While the Fed could use the quantity of money, the exchange rate, or a short-term interest rate, the Fed chooses to use a short-term interest rate, in particular, the federal funds rate. The federal funds rate is the interest rate on overnight loans of reserves that commercial banks make to each other.
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One tenet of classical economics is that
A) the role of the government should be limited, since the market will always be self-correcting. B) the government should set a minimum wage slightly above the natural market equilibrium rate. C) the government should intervene whenever necessary to avoid any unemployment. D) wages and prices are "sticky downward."
members to the federal reserve systems board of governors
What will be an ideal response?
Assume that CDs are a normal good and that the price of stereo equipment falls while the labor costs of producing CDs increase. What will happen in the market for CDs?
What will be an ideal response?
When people became ________ concerned with the underlying value of their houses and became ________ concerned with the expectations of the prices of their houses increasing, a housing bubble occurred
A) less; less B) less; more C) more; less D) more; more