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The Old System-Tools of FED in a Limited Reserve System

Last updated over 1 year ago

3 Nsɛmmisa

1

Asemmisa {{asɛmmisaAhyɛnsode}}

1.

Sort the following tools into increasing and decreasing the money supply.

Decrease the RR
Increase the RR
Decrease the DR
Increase the DR
(FED) Sell Bonds
(FED) Buy Bonds
Influence a Decrease in the FFR
Influence an Increase in the FFR

Increase the Money Supply
Decrease the Money Supply

1

1

Asemmisa {{asɛmmisaAhyɛnsode}}

2.

Sort the following into expansionary and contractionary monetary policy.

Influence a Decrease in the FFR
Increase the DR
(FED) Less Buying OMOs
Increase the RR
Decrease the DR
(FED) More Buying OMOs
Decrease the RR
Influence an Increase in the FFR

Expansionary Monetary Policy
Contractionary Monetary Policy

Asemmisa {{asɛmmisaAhyɛnsode}}

3.

Sort into the appropriate category

The Fed does more purchasing OMOs
Deflation hits the US economy
Banks raise ATM fees
Qd of Money < Qs of Money
The Fed increases the discount rate
Nominal Interest Rates Fall
Qd of Money > Qs of Money
The Fed influences an increase in the Federal Funds Rate.
The Fed lowers the reserve requirement.
Nominal Interest Rates Rise
Credit cards increase their average percentage rates (APRs)
The economy is booming and more households are finding employment

Supply of Money Increases
Supply of Money Decreases
Demand of Money Increases
Demand of Money Decreases
Shortage of Money
Surplus of Money