FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 13: The Tools and Goals of Central Bank Monetary Policy

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 21

True/False

Review LaterAdd Note

Review Later

The term "fiscal policy" refers to the impact of Federal Reserve open market operations upon the size of the government's debt.

A) True
B) False

Correct Answer

verified

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

The central bank that uses U.S. dollar-euro currency swaps to influence economic conditions in its home country is the:

A) Bank of Japan
B) Bank of France
C) Bank of Mexico
D) Bank of Canada
E) None of the above

F) B) and E)
G) A) and E)

Correct Answer

verified

Show Answer

Question 23

True/False

Review LaterAdd Note

The federal funds rate reflects the "price" of reserves in the banking system.

The maximum loan value for marginable stocks, convertible bonds and short sales are specified under rules set out in the Federal Reserve Regulations G, T and U.

In problem 3 above suppose the supply of nonborrowed reserves falls to $490 million due to open-market sales by the central bank. Holding all other factors constant what happens to the equilibrium Federal funds interest rate? If nonborrowed reserves drop to $490 million while borrowed reserves increase to $56 million, all else held equal, what happens to the equilibrium funds rate?

Why do you think reserve requirements and discount rates are being phased out as policy tools by many central banks around the world? Are reserve requirements and the discount rate a general credit control or a selective credit control? Why?

The Swiss National Bank uses currency swaps with foreign central banks to carry out its monetary policy goals.

Explain the difference between an RP and a straight (or outright) open market transaction. Why is each used? What is a runoff? An agency operation?

In the 1990s and early 21st century Japan was struggling with deflation and used a policy establishing a zero interest rate and injecting reserves into the banking system at a rapid pace, which is referred to as

If the Federal Reserve wishes to put upward pressure on market interest rates, what would it be most likely to do? How would it proceed to push the Federal funds rate in an upward direction? How would it lower the funds rate?

The manager of the Trading Desk that carries out open market operations on behalf of the Federal Reserve System is a vice president at the Federal Reserve Bank of New York.

One of the limitations of monetary policy is continuing changes in the structure of the economy itself which disturb the linkages between monetary variables and economic conditions.

Why are open market operations increasingly the most popular and frequently used monetary policy tool? What are the principal effects of open market operations on the financial system?

How does the reserve requirement tool affect the ability of deposit-type financial institutions to create money? What are the principal advantages and disadvantages of the reserve requirement tool?

Changes in the rate of money supply growth appear to precede changes in economic activity.

How and why does a depository institution borrow from the central bank? Explain what happens when a central bank changes its discount or lending rate. What are the principal advantages and disadvantages of the discount policy tool?

Nearly all central banks appear to work through:

The majority of loans granted through the Fed's discount window are secured by:

What is interest-rate targeting? Which interest rate does the Federal Reserve focus upon in its conduct of monetary policy?

One positive aspect of inflation is its impact on the allocation of resources.