What are the three tools of monetary policy

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1. What are the 3 tools of monetary policy?

2. The FED is facing a problem of inflation. What policy should be used? How would each of the tools at the FED’s disposal be used? Be Specific.

3. The FED is facing a problem of unemployment. What policy should be used? How would each of the tools at the FED’s disposal be used? Be Specific

4. Bank deposits: 500 million. Required Reserve Ratio: .25

Use the monetary policy equations provided to calculate.

a. Monetary Multiplier =

b. Required Reserves =

c. Excess Reserves =

d. Potential Money Created=

5. If a student deposits a $600 tax refund and the required reserve ratio changes to .2, then how much additional money could be potentially created in the economy?

Reference no: EM131194401

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