Question: The long list of central bank goals includes the stability
The long list of central bank goals includes the stability of interest rates and exchange rates. You look on the central bank Web site and note that they have increased interest rates at every one of their meetings over the last year. You read the financial press and see references to how the exchange rate has moved in response to these interest-rate changes. How could you reconcile this behavior with the central bank pursuing its objectives?
Answer to relevant QuestionsSuppose the government is heavily in debt. Why might it be tempting for the fiscal policymakers to sell additional bonds to the central bank in a move that it knows would be inflationary? What are the Federal Reserve’s goals and who established them? How are Fed officials held accountable for meeting them? Explain why the Chair is most influential Fed official. Currently, all the national central banks in the Euro system are involved with the day-to-day implementation of monetary policy. What do you think the advantage would be of centralizing the conduct of these day-to-day ...Why did the “no-bailout” clause of the Maastricht Treaty come under stress during the financial crisis of 2007-2009? Suppose a major bank needs to borrow $20 billion overnight that it cannot obtain from private creditors. The Fed is willing to make a discount loan of $20 billion provided that it will not alter interbank lending rates. How ...
Post your question