What are excess reserves, What are excess reserves? Why

What are excess reserves

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8. What tools does the Federal Reserve use to implement monetary policy?Describe how and why each of them impacts the monetary base and/or the Fed funds rate.
9. How are required reserves calculated? What assets of the banks can be used to meet their required reserves?

10. What are excess reserves? Why would banks keep them? How do banks current holdings of excess reserves compare to what they have historically held? Why?

11. What are the three key ratios that impact the money multiplier? Who controls each? How does a change in each affect the size of the money supply given a constant monetary base?

12. Why does a central bank need a monetary policy target? What does the Fed seem to be relying on now as its primary target to guide monetary policy?

13. Describe the Equation of Exchange and the Quantity Theory of Money. Under the Quantity Theory how will the doubling of the money supply impact the price level and employment?

Reference no: EM13552759

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