How does the federal reserve really influence interest rate

Assignment Help Business Economics

Reference no: EM131238847

How does the federal reserve really influence the interest rates and cause them to go up and down?

Also when the federal reserve sells securities they take money out of the economy because banks buy the securitie.s But my question is what kind of securities are they and what do the banks get from buying them. What are the incentive to buy the securities from the Fed. And what does the federal reserve do with the money they receive from the banks that they take out of the economy. Won't they owe the banks interest of the securities they sold just like when a bank issues bonds the fed gives them money but they have to pay the money back with interest to the fed.

Reference no: EM131238847

Questions Cloud

Defines and describes emotional intelligence : What risks or challenges might a health care manager encounter if he or she has not mastered these objectives? Explain. How will accomplishing these objectives support your success in management?

If good or service is necessity rather than luxury : If good or service is a necessity rather than a luxury then the:

The market for synthetic leather baseball gloves : If aliens come and take a large percentage of our cows what happens in the market for synthetic leather baseball gloves?

What would be the full economic price of this legislation : From California to New York, legislative bodies across the United States are considering eliminating or reducing the surcharges that banks impose on noncustomers, who make $14 million in withdrawals from other banks’ ATM machines. What would be the f..

How does the federal reserve really influence interest rate : How does the federal reserve really influence the interest rates and cause them to go up and down? Also when the federal reserve sells securities they take money out of the economy because banks buy the securitie.s But my question is what kind of sec..

How did demographic change described under peopling impact : How did demographic change described under "Peopling" impact the developments that are listed under "Work, Exchange and Technology

Develop and finalise your project plan : Develop project plan - In this task you will develop and finalise your Project Plan based on the approved scope and input from stakeholders

How does china devalue their own currency : How does china devalue their own currency? And why would they do that? People say they do it to increase their exports but that will lower the price they receive for their exports so is it really worth it? What the reasoning behind it?

Consider market for steel that also produces air pollution : Consider the market for steel that also produces air pollution. The damages become more severe as steel production increases. The steel market is defined by the demand, supply and external costs below. Calculate and graph the market quantity, price, ..

User Account

All Pages