Sort the following tools into increasing and decreasing the money supply.
Influence a Decrease in the FFR
(FED) Buy Bonds
Influence an Increase in the FFR
Increase the DR
Increase the RR
(FED) Sell Bonds
Decrease the DR
Decrease the RR
Increase the Money Supply
Decrease the Money Supply
Sort the following into expansionary and contractionary monetary policy.
Influence a Decrease in the FFR
Decrease the RR
Decrease the DR
Increase the DR
(FED) Less Buying OMOs
Influence an Increase in the FFR
Increase the RR
(FED) More Buying OMOs
Expansionary Monetary Policy
Contractionary Monetary Policy
Sort into the appropriate category
Nominal Interest Rates Fall
The Fed does more purchasing OMOs
Credit cards increase their average percentage rates (APRs)
The Fed influences an increase in the Federal Funds Rate.
Nominal Interest Rates Rise
The economy is booming and more households are finding employment
Qd of Money < Qs of Money
Deflation hits the US economy
Banks raise ATM fees
The Fed increases the discount rate
Qd of Money > Qs of Money
The Fed lowers the reserve requirement.
Supply of Money Increases
Supply of Money Decreases
Demand of Money Increases
Demand of Money Decreases
Shortage of Money
Surplus of Money