What steps can the fed take to stimulate the economy

Reference no: EM133336637

Questions:

When the US. Treasury sells bonds, the money supply does not increase, but when the Central Bank sells bonds, the money supply contracts. Explain why.

If the required reserve is 10% and decreases to 5%, what happens to the money supply? Give a general answer explaining the effect.

Hyperinflation means prices rise at an uncontrolled rate, such as 20-30% per month. Why does hyperinflation occur? Explain.

What steps can the Fed take to stimulate the economy? What are problems with those type of policies? How do you know they will work?

Reference no: EM133336637

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