Questions from Financial Markets

Q: Why and how did the Fed intervene in the commercial paper market

Why and how did the Fed intervene in the commercial paper market during the credit crisis?

Q: Why did the Fed purchase long-term Treasury securities in 2010

Why did the Fed purchase long-term Treasury securities in 2010, and how did this strategy differ from the Fed’s usual operations?

Q: What was TALF, and why did the Fed create it?

What was TALF, and why did the Fed create it?

Q: Explain how the Fed’s “quantitative easing” strategies differed from the

Explain how the Fed’s “quantitative easing” strategies differed from the traditional strategy of buying short-term Treasury securities.

Q: Briefly describe the origin of the Federal Reserve System. Describe the

Briefly describe the origin of the Federal Reserve System. Describe the functions of the Fed district banks.

Q: Why do the Fed’s open market operations have a different effect on

Why do the Fed’s open market operations have a different effect on money supply than do transactions between two depository institutions?

Q: The Fed focuses its control on the federal funds rate, yet

The Fed focuses its control on the federal funds rate, yet indirectly influences many other types of interest rates. Explain.

Q: Should the Fed or Congress decide the fate of large financial institutions

Should the Fed or Congress decide the fate of large financial institutions that are near bankruptcy?

Q: Explain how the Fed influences the monthly mortgage payments on homes.

Explain how the Fed influences the monthly mortgage payments on homes. How might the Fed indirectly influence the total demand for homes by consumers?

Q: Explain how each type of financial institution serves as a financial intermediary

Explain how each type of financial institution serves as a financial intermediary.