Monetary Policy

Question
What is open market operation?
1 / 18
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Slide 1: Tekstslide
EconomieTertiary Education

In deze les zitten 18 slides, met interactieve quizzen en tekstslides.

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Question
What is open market operation?

Slide 1 - Tekstslide

Answer here

Slide 2 - Woordweb

Chapter 16.1: Monetary Policy
Pages 490-497

Slide 3 - Tekstslide

Objectives
Identify the key terms
Analyze the Fed's monetary tools
Discuss the effect of expansionary and contractionary policies


Slide 4 - Tekstslide

​The federal funds
rate (FFR) is the  interest rate that banks  
charge one another to
borrow money.​
Open market
operations are the  sales and purchase of  
federal government
securities.


Slide 5 - Tekstslide

The discount rate is
the interest rate that the  Fed charges when it lends  money to other banks.​
​The prime rate is  the interest rate that  banks charge their best  
customers.​

Slide 6 - Tekstslide

the interest rate that
banks charge their best
customers.​
the interest rate that the Fed charges when it lends money to other banks.​
 the interest rate that banks charge one another to borrow money.​
Federal Fund Reserve
Discount rate
Prime rate

Slide 7 - Sleepvraag

Slide 8 - Tekstslide

Why is it inaccurate to say that the Fed sets
the federal funds rate?

Slide 9 - Open vraag

What is the relationship between the discount
rate and the prime rate?

Slide 10 - Woordweb

Answer
 (The prime rate tends to rise and fall as the discount rate does,
because banks charge their customers more than it costs them to borrow money from the Fed.)

Slide 11 - Tekstslide

1.How should a contractionary monetary policy affect interest rates
and the rate of inflation? Why?
2.How should an expansionary monetary policy affect interest rates 
and the unemployment rate? Why?
3.How does the Fed use open market operations as a monetary policy
tool?


Slide 12 - Tekstslide

Answer here

Slide 13 - Woordweb

Answer
1. Interest rates will rise, inflation rate will fall.
Higher interest rates discourage lending, which
will decrease aggregate demand, slow GDP
growth, and lower general price level.​

Slide 14 - Tekstslide

2.Interest rates will fall, unemployment will fall.
Lower interest rates encourage lending, which
will increase spending and investment, increase
aggregate demand, and speed GDP growth.​

Slide 15 - Tekstslide

3.By buying and selling government securities the
Fed affects the amount of reserves in the bank​ing system, which in turn determines whether
the money supply will expand or contract

Slide 16 - Tekstslide

___________________ is a plan to increase the amount of money in
circulation.
A
Tight money
B
Expansionary monetary policy
C
Monetary policy
D
Contractionary monetary policy

Slide 17 - Quizvraag

Write the main points of the lesson.

Slide 18 - Woordweb