Monetary Policy Questions and Answers

Monetary Policy

If all other things remain equal, aggregate demand and, therefore, nominal GDP will not rise as quickly as it had been before the central bank took this action. When the central bank sells...

Latest answer posted April 8, 2013 3:07 pm UTC

1 educator answer

Monetary Policy

Combatting inflation and combatting unemployment are two opposite tasks. Monetary policy tools are used in opposite ways to combat these two economic problems. When there is too much inflation, it...

Latest answer posted October 1, 2013 3:23 pm UTC

1 educator answer

Monetary Policy

The three main tools of monetary policy are open market operations, reserve requirements, and interest rates. Let us define monetary policy and then look at each tool briefly. Monetary policy is...

Latest answer posted September 30, 2013 3:53 pm UTC

1 educator answer

Monetary Policy

Monetary policy is policy that the federal government pursues that aims to keep the economy stable by manipulating the money supply. When the economy is not doing well, the government pursues a...

Latest answer posted November 6, 2013 1:22 am UTC

1 educator answer

Monetary Policy

By lowering the discount rate, the Federal Reserve is attempting to encourage economic activity and infuse liquid capital into the economy. By lowering the discount rate, banks can borrow money...

Latest answer posted May 23, 2019 1:12 pm UTC

2 educator answers

Monetary Policy

The goals of the monetary policy of the Federal Reserve are to maintain stable prices, maximize employment, and promote moderate long-term interest rates. The most important tools that the Fed uses...

Latest answer posted March 30, 2019 1:19 am UTC

2 educator answers