If the Fed entered the federal funds market as a borrower or a lender to make sure the market rate always equals the target rate, they would be doing all of the following except:
A) making unsecured loans.
B) in essence paying interest on excess reserves.
C) eliminating a lot of valuable information coming from the market.
D) following the directives issued by Congress.
Correct Answer:
Verified
Q4: Which of the following statements is most
Q8: If the current market federal funds rate
Q10: The tools of monetary policy include:
A)the target
Q11: If the market federal funds rate were
Q12: If the market federal funds rate were
Q15: Which of the following statements is most
Q15: The ways the Fed can inject reserves
Q16: The tools of monetary policy available to
Q17: Most central banks, including the Fed and
Q19: The focus for most central banks today
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