A Federal Reserve publication observed that today, the The Feds primary tool for adjusting the federal funds

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A Federal Reserve publication observed that “today, the The Fed’s primary tool for adjusting the federal funds rate is interest on reserve balances.”

a. Briefly explain the reasoning behind this observation.

b. Which other monetary policy tool does the Fed use in managing the federal funds rate?

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Macroeconomics

ISBN: 9780138102494

9th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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Question Posted: Apr 16, 2024 09:00 AM

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A Federal Reserve publication observed that today, the The Feds primary tool for adjusting the federal funds

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a The observation that the Federal Reserves primary tool for adjusting the federal funds rate is interest on reserve balances stems from the postgloba...View the full answer

Macroeconomics

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