Under the Fed's current interest-rate-targeting approach to monetary policy, if the demand for federal funds by depository institutions increases today, then, other things being equal
A) the market federal funds rate decreases, and the Fed's Trading Desk responds by selling bonds.
B) the market federal funds rate increases, and the Fed's Trading Desk responds by buying bonds.
C) the market federal funds rate decreases, and the Fed's Trading Desk responds by buying bonds.
D) the market federal funds rate increases, and the Fed's Trading Desk responds by selling bonds.
B
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Under the current managed float exchange rate regime, countries with ________ in their balance of payments frequently do not want to see their currencies ________ because it makes their goods more expensive abroad and foreign goods cheaper in their
countries. A) surpluses; depreciate B) deficits; depreciate C) surpluses; appreciate D) deficits; appreciate
In the real business cycle model, an increase in current total factor productivity leads to
A) an increase in investment. B) a decrease in investment. C) no change in investment. D) an ambiguous response of investment.
Refer to Scenario 17.1. The lowest level of y* that can be set and still have only the high-productivity people meet it is
A) 16. B) 13 1/3. C) 13. D) 8. E) 0.
Which one of the following would cause an increase in the demand for hotel rooms in Hawaii?
A) an increase in airfares to Hawaii B) a decrease in airfares to Hawaii C) an upward movement along the demand curve for stays in Hawaiian hotel rooms D) a downward movement along the demand curve for stays in Hawaiian hotel rooms