Solutions to chapter 8

Solutions to chapter 8 - Chapter 8 Conduct of Monetary...

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Chapter 8 Conduct of Monetary Policy: Tools, Goals, Strategy and Tactics The Federal Reserve’s Balance Sheet Liabilities Assets Open Market Operations Discount Lending The Market for Reserves and the Federal Funds Rate Supply and Demand in the Market for Reserves How Changes in the Tools of Monetary Policy Affect the Federal Funds Rate Tools of Monetary Policy Open Market Operations A Day at the Trading Desk Discount Policy Operations of the Discount Window Lender of Last Resort Inside the Fed Box: Discounting to Prevent a Financial Panic: The Black Monday Stock Market Crash of 1987 Reserve Requirements Monetary Tools of the European Central Bank Open Market Operations Lending to Banks Reserve Requirements The Price Stability Goal and the Nominal Anchor The Role of a Nominal Anchor The Time-Inconsistency Problem Other Goals of Monetary Policy High Employment Economic Growth Interest-Rate Stability Stability in Financial Markets Stability in Foreign Exchange Markets Should Price Stabilty Be the Primary Goal of Monetary Policy? Hierarchical Versus Dual Mandates Price Stability as the Primary, Long-Run Goal of Monetary Policy
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Chapter 8 Conduct of Monetary Policy: Tools, Goals, Strategy and Tactics 39 Monetary Targeting Monetary Targeting in the United States, Japan and Germany Global Box: The European Central Bank’s Monetary Policy Strategy Advantages of Monetary Targeting Disadvantages of Monetary Targeting Inflation Targeting Inflation Targeting in New Zealand, Canada and the United Kingdom Advantages of Inflation Targeting Disadvantages of Inflation Targeting Inside the Fed Box: The New Chairman and Inflation Targeting Tactics: Choosing the Policy Instrument Criteria for Choosing the Policy Instrument The Practicing Manager: Using a Fed Watcher ± Answers to End-of-Chapter Questions 1. Disagree. Some unemployment is beneficial to the economy because the availability of vacant jobs makes it more likely that a worker will find the right job and that the employer will find the right worker for the job. 2.
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Solutions to chapter 8 - Chapter 8 Conduct of Monetary...

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