1 Ifthe Fed intends to decrease the money supply what tools

1 Ifthe Fed intends to decrease the money supply, what tools can be used? Briefly explain how each tool should be implemented 2. Ifthe Fed sells $20 million worth of government bonds to the public (open market sale), will the lending capacity on the banking system increase or decrease? By how much will the money supply change? Assume the required reserve ratio to be 0.1

Question No .1)

Federal Reserve has been mandated to achieve dual objectives of full employments and price stability. In order to decrease money supply in US, it would be using following tools:

1 Ifthe Fed intends to decrease the money supply, what tools can be used? Briefly explain how each tool should be implemented 2. Ifthe Fed sells $20 million wo

1 Ifthe Fed intends to decrease the money supply what tools

Solution

Get Help Now

Submit a Take Down Notice