1
answer
0
watching
192
views
28 Sep 2019
The Fed wants to increase the money supply (which is currently 6,000) by 300. The money multiplier is 4, and people hold no cash. For each 1 percentage point the discount rate falls, banks borrow an additional 30. Explain how the Fed can achieve its goals using the following tools:
a. Change the reserve requirement.
b. Change the discount rate.
c. Use open market operations.
The Fed wants to increase the money supply (which is currently 6,000) by 300. The money multiplier is 4, and people hold no cash. For each 1 percentage point the discount rate falls, banks borrow an additional 30. Explain how the Fed can achieve its goals using the following tools:
a. Change the reserve requirement.
b. Change the discount rate.
c. Use open market operations.
Anne Gillian DueroLv10
28 Sep 2019