Question

Please answer Questions 5, 7, 11 and 14 on page 130 of the textbook. Complete your answer in Word, Excel, or both.

5. What are the primary responsibilities of the Federal Open Market Committee?

7. Why did reserve deposits increase to the point that this account represented the largest liability account on the Federal Reserve’s balance sheet in the late 2000s?

11. Explain how a decrease in the discount rate affects credit availability and the money supply.

14. Which of the monetary tools available to the Federal Reserve is most often used? Why?

Answer 1

As per policy, only one question is allowed to answer at a time, so answering Q5 :

Answer 5)

The primary responsibilities of the Federal Open Market Committee (FOMC) includes the oversee

the US open market operations regarding money which is concerned with the Federal buying

and selling the country's Treasury securities. It also takes decisions about interest rates and the money

supply and its growth. It also draws the short-term objective for the open market operations

and aims at the federal fund's interest rate. As responsibility of committee also includes making US

Federal policies regarding the exchange value of the dollar.