Discuss why the Fed can either both a quantity and a price (interest rate) target unlike other monopolies.
What will be an ideal response?
The Fed sets monetary policy primarily through the IOER rate. This allows the Fed to raise the interest rate in the economy without altering the supply of reserves because the amount of reserve supply is greater that reserve demand at IOER.
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In 2009, the top 1 percent of income earners
a. made about 13 percent of all income. b. paid about 22 percent of all taxes. c. made over 2.5 times the percentage of all income earned by the lowest quintile. d. All of the above are correct.
When considering perfect competition the absence of entry barriers implies that
A. firms can enter but cannot get out of the industry easily. B. all firms will earn economic profit. C. firms can enter and leave the industry without serious impediments. D. no firm can enter the industry.