Questions from Financial Markets

Q: Explain how the Fed uses open market operations to reduce the money

Explain how the Fed uses open market operations to reduce the money supply.

Q: How does the Fed’s monetary policy affect economic conditions?

How does the Fed’s monetary policy affect economic conditions?

Q: Describe the Fed’s monetary policy response to the credit crisis that began

Describe the Fed’s monetary policy response to the credit crisis that began in 2008.

Q: Explain why an increase in the money supply can affect interest rates

Explain why an increase in the money supply can affect interest rates in different ways. Include the potential impact of the money supply on the supply of and the demand for loanable funds when answer...

Q: Which factors might be considered by financial market participants who are assessing

Which factors might be considered by financial market participants who are assessing whether an increase in money supply growth will affect inflation?

Q: Explain collateralized debt obligations (CDOs).

Explain collateralized debt obligations (CDOs).

Q: Explain how the Fed’s monetary policy could depend on the fiscal policy

Explain how the Fed’s monetary policy could depend on the fiscal policy that is implemented.

Q: Describe the economic tradeoff faced by the Fed in achieving its economic

Describe the economic tradeoff faced by the Fed in achieving its economic goals.

Q: Describe an active monetary policy.

Describe an active monetary policy.

Q: Explain why interest rates tend to decrease during recessionary periods. Review

Explain why interest rates tend to decrease during recessionary periods. Review historical interest rates to determine how they react to recessionary periods. Explain this reaction.