Why might fed officials have believed that they were

Assignment Help Financial Management

Reference no: EM131303256

In his history of the Federal Reserve, Allan Meltzer of Carnegie Mellon University describes the views of Federal Reserve officials in the fall of 1930:

Most of the policymakers regarded the substantial decline in short-term market interest rates . . . as the main . . . indicators of the current position of the monetary system.... [Policy] was "easy" and had never been easier in the experience of the policymakers of the Federal Reserve System.

a. What does it mean to say that Fed policy is "easy"?

b. In the context of the early 1930s, were low nominal interest rates a good indicator that policy was easy? Why might Fed officials have believed that they were?

Reference no: EM131303256

Questions Cloud

The bursting of the housing bubble had on the us economy : What does it mean to say that there is a bubble in the housing market? Briefly describe the effect that the bursting of the housing bubble had on the U.S. economy.

How would you be able to measure that variable : What do you think is a better variable to measure worker productivity during work? How would you be able to measure that variable? What do you do at work to make it seem that your productivity is outstanding even though you are on Facebook, LinkedIn,..

What incentive was to create and attend the first earth day : Briefly explain what the incentive was to create and attend the first Earth Day. What economic principles might explain your answer to Question 1?

Would the nominal interest rates on these bonds be higher : If deflation occurred, would the nominal interest rates on these bonds be higher or lower than the real interest rates? Briefly explain.

Why might fed officials have believed that they were : In the context of the early 1930s, were low nominal interest rates a good indicator that policy was easy? Why might Fed officials have believed that they were?

What were the fixed and variable costs for the business : What were the fixed and variable costs for this business? What were some of their long-run costs? Who were their competitors? What were the factors that contributed to the decision to shut down production?

Compare that value to current trading price of share of tfc : From the scenario, value a share of TFC's stock using a growth model method and compare that value to the current trading price of a share of TFC. Determine whether the stock is undervalued or overvalued. Provide a rationale for your response

What was the bank of united states : What was the Bank of United States? When did it fail? Why did it fail?- Why might the Fed's failure to save the Bank of United States provide a rationale for the policy of "too big to fail"?

Describe the main items in a gantt chart : Describe the main items in a Gantt chart. Do you think everyone uses Gantt charts properly? Why or why not? Discuss methods for shortening a project schedule.

User Account

All Pages